Asian stocks extend global rally as weak US data fuels rate-cut expectations

Asian stocks extended a global rally on Wednesday after another round of weak US economic data strengthened expectations that the Federal Reserve will cut interest rates again next month.

Investor confidence was also supported by reports that US President Donald Trump’s top economic adviser is the frontrunner to become the next Federal Reserve chair, adding to the positive market mood.

Expectations for a December rate cut have surged after several senior Fed officials signaled support for a third straight reduction, pointing to labour market weakness even as inflation remains elevated.

New US data, much of it delayed by the recent government shutdown, added to the case for easier policy. ADP reported that private employers shed an average of 13,500 jobs per week in the four weeks to November 8. Retail sales growth slowed in September, missing expectations, while consumer confidence dropped to a seven-month low as Americans grew more worried about job conditions and future income.

Wholesale inflation rose in September in line with forecasts, driven mainly by higher goods prices, underscoring rising costs for businesses.

Analysts noted that although the data is outdated, it still influences markets that are hungry for economic signals.

Bloomberg also reported that Kevin Hassett, head of the White House National Economic Council and an advocate for lower interest rates, is seen as the leading candidate to replace Jerome Powell when his term ends next year, increasing expectations of a more dovish Fed.

Wall Street rose for a third straight session on Tuesday, and Asian markets followed suit. Tokyo and Seoul gained around 2 percent, while Hong Kong, Shanghai, Sydney, Singapore, Taipei and Wellington also advanced.

The rebound comes after earlier November pullbacks due to concerns about high valuations in tech stocks, particularly companies heavily investing in artificial intelligence.

In corporate news, Alibaba shares fell more than 1 percent after the company reported a profit decline linked to consumer subsidies and investment in data centres supporting its AI plans.

Key figures as of 0230 GMT

Tokyo - Nikkei 225: up 1.9 percent at 49,605.57
Hong Kong - Hang Seng Index: up 0.6 percent at 26,054.70
Shanghai - Composite: up 0.2 percent at 3,876.05
Euro/dollar: $1.1583
Pound/dollar: $1.3191
Dollar/yen: 155.82
West Texas Intermediate: up 0.2 percent at $58.06 per barrel
Brent North Sea Crude: up 0.2 percent at $62.62 per barrel
New York - Dow: up 1.4 percent at 47,112.45
London - FTSE 100: up 0.8 percent at 9,609.53