Asian stock markets continued their upward streak on Thursday, driven by strong earnings, trade deal optimism, and bullish sentiment from Wall Street. As confidence spread globally, key indices in Asia and Europe surged, while investors awaited major policy signals from central banks.
Why It Matters
Investor sentiment has brightened as global trade tensions appear to ease. With the U.S. striking deals with multiple Asian economies and the European Union possibly next, optimism is translating into significant gains in global equities. A strong earnings season and signs of resilience in corporate performance have added fuel to the rally.
What’s Happening in the Markets
Asia
- MSCI Asia-Pacific Index (excluding Japan) climbed 0.4%, nearing a four-year high.
- Japan’s Nikkei 225 edged closer to its all-time high from last year, extending gains from Wednesday.
- Topix (Tokyo’s broader index) and Singapore’s STI also broke past their previous peaks.
- South Korea’s SK Hynix and India’s Infosys reported strong earnings, shrugging off trade uncertainty.
Europe
- Pan-European futures rose 1.17%,
- German DAX futures up 1.15%,
- UK FTSE futures gained 0.39%.
These point to a strong opening ahead of the European Central Bank’s (ECB) policy decision.
Trade Talks Fueling Optimism
Markets are encouraged by progress in U.S. trade diplomacy:
- Deals have been struck with Japan, the Philippines, and Indonesia.
- A potential agreement with the European Union is in sight.
- U.S. President Donald Trump has floated a 15% broad tariff on EU goods, though diplomacy may avert harsher measures.
“There’s nothing like a trade deal with a big trading nation… Everything seems rosy at the moment,” said NAB strategist Gavin Friend.
Central Bank Focus
- Trump is set to visit the Federal Reserve on Thursday—an unexpected move that raises concerns about political pressure on the Fed.
- The Fed is expected to hold rates steady at next week’s meeting.
- ECB is also expected to pause rate changes today after seven consecutive cuts, with another possible cut eyed for December.
Bond and Currency Markets
- U.S. 10-year Treasury yields steady at 4.39%.
- 2-year yields touched 3.89%.
- The dollar dropped 0.31% against the yen to 146.03, still above its April low.
- Euro held firm at $1.1774.
- The dollar index fell to 97.156, reflecting the currency’s broader weakness.
Earnings Season Snapshot
- With 23% of S&P 500 companies reporting Q2 earnings, 85% have beaten estimates (per LSEG data).
- Strong corporate performances are reinforcing bullish investor sentiment.
Commodities Check
- Oil prices rose on hopes that trade stability will support global growth.
- U.S. crude up 0.52% to $65.59 per barrel.
- U.S. crude up 0.52% to $65.59 per barrel.
- Gold eased slightly to $3,382.79 per ounce, as risk appetite dented safe-haven demand despite the weaker dollar.
In Summary
Asian markets are riding a wave of optimism backed by positive trade developments, solid earnings, and hopes of continued central bank support. With key decisions pending from the ECB and Fed, and diplomatic efforts continuing, global markets remain cautiously optimistic as they approach new highs.