Asian stocks extend rally on rate cut optimism

Asian equity markets climbed again on Tuesday, extending a global rally as expectations of further US interest rate cuts and easing concerns over artificial intelligence spending lifted investor sentiment ahead of the Christmas break. Gold and silver also rose to fresh record highs.

Optimism was fuelled by recent US data showing rising unemployment and slowing inflation, giving the Federal Reserve more scope to ease monetary policy. The mood was further supported by strong earnings from Micron Technology, which helped revive interest in technology stocks after recent worries about overstretched AI valuations.

Tech shares led gains on Wall Street, with companies such as Nvidia and Tesla advancing as investors returned to the sector. Asian markets followed suit, with Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Seoul, Taipei, Wellington and Jakarta all posting solid gains.

Precious metals continued their surge, with gold nearing $4,500 an ounce and silver approaching $70, supported by expectations of lower US rates and ongoing geopolitical tensions linked to US action against Venezuelan oil shipments and the war in Ukraine.

Oil prices edged lower after jumping earlier on concerns over Washington’s blockade of sanctioned Venezuelan tankers, while currency markets saw the yen strengthen slightly against the dollar.

Overall, markets remained upbeat as investors looked to end the year on a positive note.