Singapore, Oct. 18 (BNA): Asian stocks rose as the dramatic shift in British financial policy brightened investor sentiment, while the US dollar took a breather at its lowest in more than a week as a rebound in risk lowered its appeal.
New British Finance Minister Jeremy Hunt abandoned most of Prime Minister Liz Truss’s economic plan that led to political turmoil fueled by market turmoil, with the pound hitting record lows in recent weeks and the Bank of England forced to step in, according to Reuters. .
Morgan Stanley analysts said the fiscal turnaround is likely to have important implications for the Bank of England as economists now revise their call for a November meeting to raise interest rates by 75 basis points, from 100 basis points.
Hunt’s move sent UK government bonds, currency and stocks higher, which also lifted Wall Street.
Tapas Strickland, head of market economics at the National Australia Bank, said that given this wholesale cancellation of Tory leadership promises to Prime Minister Truss, the question remains open how long Truss will remain in power.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.43%, while Japan’s Nikkei rose 0.6%. S&P 500 and Nasdaq futures rose 0.8%.
The Chinese stock market opened almost unchanged and rose 0.12% to 3,088.54 as the ruling Communist Party of China congress continues to take place twice each decade this week.
Chinese state banks are stepping up their intervention to defend the weakening yuan, banking sources told Reuters on Monday. While many companies have announced share buyback programs.
In the currency markets, the US dollar was lower against most currencies overnight, with the British pound falling early today after rising 1.6% in the previous session.
The Australian dollar rose after the Reserve Bank of Australia said it expects to raise interest rates further in the coming months.
The yen touched a new 32-year low of 149.10 per dollar on Monday, not far from the psychological scale of 150. Investors are watching for any signs of further intervention from the Bank of Japan, with authorities repeatedly warning of a firm response to the rapid declines of the Japanese yen. .
NAB’s Strickland said many are pointing to 150 as a key threshold that the government will be keen to avoid continued interruptions for political reasons.
Meanwhile, China has postponed the release of economic indicators, including the country’s third-quarter gross domestic product and trade data, which were scheduled for last Friday.
Brent crude rose 0.08 percent to $91.69 a barrel, while US crude rose 0.04 percent to $85.49 a barrel.
FAE