Global financial markets showed signs of optimism on Friday as Asian stocks mostly advanced, buoyed by robust gains on Wall Street and a decrease in oil prices. This positive momentum follows the recent decision by the Federal Reserve to adjust its interest rates, a move aimed at curbing inflation.
Japan’s Nikkei 225 saw an increase of 0.8% in early trading, while South Korea’s Kospi index rose sharply by 2.1%. In Hong Kong, the Hang Seng index climbed 0.8%, and China’s Shanghai Composite edged up by nearly 0.8%. Meanwhile, Australia’s S&P/ASX 200 recorded a modest gain of 0.1%.
The upward trend in Asian markets mirrored the performance of U.S. indices in the previous session. The S&P 500 climbed 1.1%, the Dow Jones Industrial Average increased by 0.6%, and the tech-heavy Nasdaq Composite surged 1.7%. These gains were partially attributed to a dip in Brent crude oil prices, which fell by 0.68% to $104.11 per barrel, and a 0.54% decline in U.S. crude, bringing it down to $101.36 per barrel.
Investor sentiment was further bolstered by the Federal Reserve’s recent decision to raise its benchmark interest rate by 0.25 percentage points. The Fed hinted at the possibility of another rate hike later this year, as part of its strategy to steer inflation towards its 2% target. This move helped ease some of the pressure on financial markets, alongside the decline in oil prices.
Additionally, the yield on the 10-year U.S. Treasury note fell to 4.93% from 5.01%, which also contributed to reducing the strain on equities. In currency markets, the U.S. dollar experienced a slight increase against the Japanese yen, reaching 156.15 yen, while the euro remained stable at $1.1480.