HONG KONG — Asian shares rose on Monday after US stock indexes hovered near records on Friday, with the Dow Jones Industrial Average closing above 40,000 for the first time.
U.S. futures rose and oil prices rose as investors focused on the Middle East, where a helicopter carrying Iranian President Ebrahim Raisi and other officials crashed in Iran’s mountainous northwestern reaches on Sunday.
The Chinese market extended last week’s gains after the central bank announced new support for the real estate sector, including lowering down payment requirements for home loans, lowering mortgage rates for the purchase of first and second homes and lifting a mortgage rate floor.
Hong Kong’s Hang Seng rose 0.5% to 19,648.19, while the property index rose 0.6% by midday. The Shanghai Composite index rose 0.3% to 3,162.08.
On Monday, the Chinese central bank left prime one- and five-year interest rates unchanged at 3.45% and 3.95%, in line with expectations. The one-year LPR serves as a benchmark for most new and outstanding loans in China, while the five-year rate influences the pricing of real estate mortgages.
In Tokyo, the Nikkei 225 index rose 1.4% to 39,346.92. The Australian S&The P/ASX 200 rose 0.6% to 7,862.70. The Kospi in Korea rose 0.6% to 2,741.55.
Elsewhere, Taiwan’s Taiex was 0.1% higher after Lai Ching-te was inaugurated as Taiwan’s new president. Lai is expected to maintain the island’s de facto independence policy from China and strengthen its defense against Beijing, which claims the island as Chinese territory.
In Bangkok, the SET rose 0.3%.
On Friday, the Dow Jones rose 0.3% to 40,003.59, a day after briefly rising above 40,000 for the first time. The index and others on Wall Street have been rising since the fall of 2022, as the U.S. economy and corporate profits have managed to hold on despite high inflation, the punishing effects of high interest rates and concerns about a recession that is inevitable seemed, but it wasn’t. arrived.
The S&The P500, the much more important index for Wall Street and most retirement savers, added 0.1% to 5,303.27. It finished just 0.1% below Wednesday’s record, completing a fourth straight week of gains. The Nasdaq index fell 0.1% to 16,685.97.
Elsewhere on the financial markets, government bond yields were higher.
A report last week fueled hopes that inflation is finally heading back in the right direction after a discouraging start to the year. That in turn revived hopes that the Federal Reserve would cut its key interest rate at least once this year.
The federal funds rate is at its highest level in more than two decades, and a cut would boost investment prices and remove some of the downward pressure on the economy.
The hope is that the Fed can accomplish the balancing act of slowing the economy enough through high interest rates to eradicate high inflation, but not so much that it causes a severe recession.
Naturally, with a growing percentage of traders betting twice, if not more, on a Fed rate cut this year, some economists are warning that the optimism may be going too far. It’s something that happens often on Wall Street.
While data reports have been better than forecast lately, “better than expected doesn’t mean good,” Bank of America economists wrote in a report from BofA Global Research.
Inflation is still higher than the Fed would like, and Bank of America’s Michael Gapen still expects the Fed to keep its key interest rate steady until the December rate cut.
On the bond market, the yield on ten-year government bonds rose from 4.38% at the end of Thursday to 4.41%.
In other trading Monday, U.S. benchmark crude rose 3 cents to $79.61 a barrel. Brent crude, the international standard, added 10 cents to $84.08 a barrel.
The US dollar rose from 155.55 yen to 155.79 Japanese yen. The euro rose from $1.0871 to $1.0877.