Global Markets Rally: Europe & Japan See Gains Amid Rate Cut Expectations & Yen Weakness
european stocks closed the week wiht strong gains, led by banking adn mining sectors, fueled by increasing expectations of a Federal Reserve interest rate cut. The Stoxx 600 index rose 0.3% to 569.6 points, marking its best weekly performance since late April. Gains were particularly strong in the banking sector, with Riviesen shares up 7.7% following reports of potential sanctions relief related to Russian assets, and ABN Bank rising 2.6% after a Goldman Sachs upgrade. The basic resources sector also benefited from rising commodity prices,climbing 1.3%.
Asian markets followed suit,with Japan’s Nikkei 225 reaching a record high,closing at 45769.50 points – surpassing its previous peak by 15 points. This surge was driven by enthusiasm surrounding artificial intelligence, boosting chip-related stocks like Advantest (up 4.3%), Softbank Group (up 3.6%), and Tokyo Electron (up 2.3%). Hitachi saw the largest gain, jumping 10.3% on news of a potential partnership with OpenAI.
The weakening yen provided further support to Japanese stocks, increasing the value of overseas earnings for major exporting companies.The yen fell for the second consecutive day against the dollar.
Markets are now awaiting further economic data from Europe and the US, with dealers largely betting on a Federal Reserve rate cut later this month following weaker-than-expected private sector wage reports. The upcoming leadership election within Japan’s ruling party is also being closely watched, with potential implications for monetary policy - a win for Sanai Takaychi could lead to increased stock market gains, higher bond yields, and a further decline in the yen.