US stock futures were little changed on Wednesday after another winning session on Wall Street, with the Dow and S&P 500 hitting new record highs. In regular trading on Tuesday, the Dow rose 0.2%, the S&P 500 gained 0.25% and the Nasdaq Composite climbed 0.56%. Semiconductor stocks led the charge, with gains from Nvidia (4%), Broadcom (1.1%), AMD (1%), Taiwan Semiconductor (4.1%) and Intel (1.1%). US-listed Chinese firms also posted strong gains after China unveiled a slate of monetary easing measures, including Alibaba (7.9%) and PDD Holdings (11.2%). Traders intensified bets on further interest rate cuts from the Federal Reserve this year after disappointing consumer confidence data, which fell to its lowest level in over three years. Investors now look ahead to new homes sales data on Wednesday and weekly jobless claims numbers on Thursday, as well as the highly-anticipated PCE report on Friday. Markets are also preparing for the third quarter earnings season.
The Nikkei 225 Index fell 0.19% to close at 37,870 while the broader Topix Index lost 0.23% to 2,651 on Wednesday, with Japanese shares breaking a four-day rally as investors continued to assess the outlook for Bank of Japan monetary policy. On Tuesday, BOJ Governor Kazuo Ueda said they have time to assess market and economic developments before adjusting monetary policy, suggesting the BOJ is in no rush to hike rates again. Investors now look ahead to minutes of the central bank’s last meeting on Thursday and Tokyo’s inflation data on Friday to guide the outlook further. Financial stocks led the decline, with sharp losses from Mitsubishi UFJ (-2.6%), Sumitomo Mitsui (-2.8%) and Mizuho Financial (-1.9%). Other index heavyweights also tumbled, including Tokyo Electron (-0.7%), Fast Retailing (-1.7%) and Hitachi (-1.8%).
The Shanghai Composite jumped 1.16% to close at 2,896 while the Shenzhen Component climbed 1.21% to 8,538 on Wednesday, extending gains of over 4% from the previous session as China unveiled a comprehensive monetary stimulus package to revive the economy and restore market confidence. On Wednesday, the People’s Bank of China lowered its one-year medium-term lending facility rate by 30 basis points to 2%. That came a day after PBOC Governor Pan Gongsheng laid out plans to cut the reserve requirement ratio by 50 basis points before the year ends and reduce key lending rates such as the seven-day repo rate, medium-term lending facility and loan prime rates. Nearly all sectors advanced, with notable performances seen from heavyweight firms like East Money Information (3.9%), Kweichow Moutai (1.9%), Shijiazhuang Chan (10%), Contemporary Amperex (2.8%) and Ping An Insurance (1.9%).
The BSE Sensex rose about 0.3% to settle at 85,169.9 on Wednesday, a fresh all-time high, fuelled by a rally in power companies, energy stocks and financials. Top gainers included Power Grid (+3.9%), after winning a transmission project, Axis Bank (+2.2%) and NTPC (+1.9%). Meanwhile, mid- and small-cap indices experienced corrections driven by valuation concerns. The strong buying momentum in the local market is primarily attributed to the Federal Reserve's outsized rate cut and China's extensive stimulus measures. Traders now await the US a slew of economic data, including the PCE index report, the Fed's preferred measure of underlying inflation, which will be released later this week, for more clues about the interest rate path.
