Asian stock markets largely advanced on Wednesday, influenced by the positive sentiment from Wall Street overnight. However, some of the major markets in the region, including China, Hong Kong, Singapore, and South Korea, remained closed due to the Lunar New Year holidays. Investors are exercising caution ahead of the U.S. Federal Reserve's interest rate decision expected later today. On Tuesday, Asian markets generally ended in negative territory.
It is anticipated that the Federal Reserve will keep interest rates steady, but investors will scrutinize the accompanying statement for future rate direction insights.
Recent economic indicators have sparked concerns about the Fed maintaining rates for an extended period. Nonetheless, numerous economists forecast that the central bank could start easing rates within the first half of the year.
According to CME Group's FedWatch Tool, there is a 74.5 percent probability that rates will be reduced by at least 25 basis points at the Fed's June meeting.
In Australia, shares showed a significant uptick on Wednesday, bouncing back from slight declines in the prior session. The benchmark S&P/ASX 200 is trading well above the 8,450 mark, spurred by positive cues from Wall Street, with strong performances across sectors, particularly in technology, energy, and financials. The S&P/ASX 200 Index is up by 77.00 points, or 0.92 percent, at 8,476.10, after reaching a peak of 8,480.00 earlier. The wider All Ordinaries Index has risen by 82.90 points, or 0.96 percent, to 8,727.40. On Tuesday, Australian stocks closed slightly lower.
Among leading miners, BHP Group is down 0.2 percent, and Rio Tinto is down almost 1 percent. In contrast, Mineral Resources has gained 1.5 percent, and Fortescue Metals has risen by over 1 percent.
In the oil sector, Woodside Energy has increased by nearly 2 percent, and Beach Energy is up by more than 1 percent, while Santos and Origin Energy have edged higher by 0.3 to 0.5 percent each.
In the technology arena, Appen has surged by over 4 percent, WiseTech Global is up by nearly 4 percent, Xero has added 2.5 percent, and Zip has increased by over 2 percent. Meanwhile, Block, the Afterpay owner, is currently in a trading halt.
Regarding the major banks, Commonwealth Bank has added almost 1 percent, National Australia Bank has edged higher by 0.4 percent, while ANZ Banking and Westpac both have gained over 1 percent.
In the gold mining sector, Evolution Mining has gone up by nearly 2 percent, Resolute Mining has risen by almost 4 percent, and Northern Star Resources has gained over 1 percent, with Gold Road Resources and Newmont up by almost 1 percent each.
Elsewhere, shares in Boss Energy have soared nearly 11 percent after the uranium miner reported a robust operational performance from its Honeymoon project.
In the economic context, consumer prices in Australia rose a seasonally adjusted 0.2 percent in the fourth quarter of 2024, falling short of the forecasted 0.3 percent, as reported by the Australian Bureau of Statistics on Wednesday. This rate is consistent with the previous quarter. Annually, inflation increased by 2.4 percent, below the anticipated 2.5 percent and down from 2.8 percent in Q3.
In currency, the Australian dollar is trading at $0.624 on Wednesday.
In Japan, the stock market is experiencing notable gains on Wednesday, breaking a three-session losing streak, buoyed by the positive sentiment from Wall Street. The Nikkei 225 has climbed above the 39,200 mark due to gains in key index components and technology stocks.
The Nikkei 225 Index closed the morning at 39,232.75, up by 215.88 points, or 0.55 percent, having reached a high of 39,448.24 earlier. Japanese stocks ended sharply lower on Tuesday.
Market heavyweight SoftBank Group is down 0.1 percent, while Fast Retailing, the operator of Uniqlo, has risen by over 1 percent. In the auto sector, Honda is slightly down by 0.5 percent, whereas Toyota is up by almost 1 percent.
In the tech sector, Advantest, Tokyo Electron, and Screen Holdings have edged higher by 0.1 to 0.5 percent each.
In banking, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are each marginally down by 0.1 percent, while Mizuho Financial has increased by over 1 percent.
Among major exporters, Canon has edged up by 0.5 percent and Sony has surged by more than 3 percent, while Mitsubishi Electric has lost almost 1 percent and Panasonic has slightly declined by 0.1 percent.
Other significant gainers include Mitsubishi Heavy Industries and IHI, both up by over 3 percent, alongside Nomura Research Institute, TDK, Nitto Denko, Trend Micro, and Furukawa Electric, all gaining nearly 3 percent each.
In contrast, Nisshin Seifun has dropped by over 3 percent, and Disco is nearly 3 percent lower.
In currency markets, the U.S. dollar is trading in the higher 155 yen range on Wednesday.In other areas of Asia, New Zealand's market experienced a modest increase of 0.2 percent. However, all other regional markets, including those in China, Hong Kong, Singapore, South Korea, Malaysia, Taiwan, and Indonesia, remained closed in observance of the Lunar New Year festivities.
On Wall Street, stocks saw a robust turnaround on Tuesday, recovering after a significant decline in the previous session. The Nasdaq, known for its concentration of technology stocks, led this upward swing following a noticeably sharp drop on Monday.
The Nasdaq rallied 391.75 points, marking a 2.0 percent gain to reach 19,733.59. This partially recuperated the 3.1 percent drop encountered the day before. Similarly, the S&P 500 rose by 55.42 points, or 0.9 percent, closing at 6,067.70. Meanwhile, the Dow Jones Industrial Average increased by 136.77 points, or 0.3 percent, ending the day at 44,850.35.
Across the Atlantic, major European markets presented a mixed performance. The French CAC 40 Index edged down slightly by 0.1 percent, whereas the UK's FTSE 100 Index and Germany's DAX Index saw upticks, rising by 0.4 percent and 0.7 percent, respectively.
In the commodities market, crude oil prices made gains on Tuesday, influenced by supply disruptions in Libya, where protestors hindered tankers from loading at the nation's two principal ports. Consequently, West Texas Intermediate (WTI) crude oil futures for February delivery ascended by $0.60, approximately 0.82 percent, settling at $73.77 per barrel.
