Equities saw a strong rebound on Tuesday following a global market turmoil driven by concerns of a US recession, prompting calls for the Federal Reserve to consider an interest rate cut before its next meeting.
The Tokyo stock market, which experienced significant losses the previous day, led the upward trend with a surge of over 10%. This surge was fueled by the purchase of undervalued stocks that had been affected by the previous market downturn.
The Nikkei in Tokyo, which had plummeted by more than 12% the day before, rallied by 10.2%. Notable gains were seen in companies like Toyota with a more than 12% increase, Sony with over nine percent, and Tokyo Electron jumping by 16.6%.
Other markets in Shanghai, Sydney, Seoul, Taipei, Mumbai, Bangkok, and Manila also experienced gains, while Hong Kong fluctuated between gains and losses, ending slightly in the negative.
Singapore and Wellington, however, faced more selling pressure. In Europe, London saw a slight increase after a two percent drop the day before, with Paris and Frankfurt also on the rise.
Market analysts cautioned that volatility is likely to persist in the near future. The recent sell-off was triggered by lower-than-expected job creation data in the US and ongoing weakness in the manufacturing sector.
There were concerns that the Fed had maintained interest rates at historic highs for too long, raising fears of a looming recession. Some analysts referred to the “Sahm Rule,” indicating a recession may be imminent based on certain economic indicators.
While Wall Street continued to struggle, the positive performance of the US services sector provided some relief. Market observers emphasized the importance of closely monitoring both stock and foreign exchange markets.
Japanese Prime Minister Fumio Kishida commented on the market movement, highlighting the importance of making informed decisions amid the ongoing market fluctuations.
Amid calls for an emergency rate cut, there were contrasting views on the necessity of such measures, with some advocating for caution and forward-looking economic analysis.
Internationally, the focus is on the Federal Reserve’s potential rate adjustments, with expectations ranging from a single 25-basis-point reduction to larger cuts in the coming months.
Market performance indicators showed mixed results, with varying trends in major global markets and currency exchange rates.
The recent market turbulence has prompted discussions on monetary policy decisions, particularly in Asia, with attention on the potential impacts of central bank actions on market stability.
Overall, the market outlook remains uncertain, with investors closely monitoring economic indicators and central bank policies for future guidance.
Source: AFP