Asian stocks rise after global gauge hits new peak

Representative image

Asian stocks climbed after gauges of US and global equities hit fresh records, with investor sentiment boosted by the Federal Reserve’s rate cut and its upbeat assessment of the US economy.

MSCI Inc.’s index of Asian shares was up 0.9% on Friday, with all its sector sub-indexes advancing. Japan’s Topix led regional gains as shares of SoftBank Group Corp. jumped more than 6% after people with knowledge of the matter said it is studying potential acquisitions including data center operator Switch Inc.

The S&P 500 climbed 0.2% on Thursday. Despite the record high, some caution for tech names persisted, as Broadcom Inc.’s shares slid in late trading after the chipmaker’s outlook for artificial intelligence revenue failed to meet investors’ lofty expectations. US stock futures were lower on Friday, with contracts on the tech-heavy Nasdaq 100 down 0.2%.

Still, Thursday’s action lifted the MSCI All Country World Index — one of the broadest measures of the stock market — to a new closing high. Up nearly 21% in 2025, it is on track for its best year since 2019.

“The momentum should continue into year-end. With rate cuts underway, a new Fed chair on deck, and earnings trending higher, the bull market looks positioned to extend into 2026,” said Gina Bolvin, President of Bolvin Wealth Management Group. “As more companies adopt AI, participation should broaden and sectors beyond the Magnificent Seven may start to show strength.”

Delivering a third consecutive interest-rate reduction on Wednesday, Fed Chair Jerome Powell voiced optimism that the US economy will strengthen as the inflationary impact from tariffs fades away. While officials maintained their outlook for just one cut in 2026, traders have stuck to bets for two such moves.

The Fed now expects the US economy to grow by 2.3% next year, up from its previous projection of 1.8%, while anticipating that the pace of inflation will slow to 2.4%.

An index of the dollar traded around a two-month low on Friday and was on track for a third weekly loss. Yields on 10-year Treasuries edged slightly lower after a small gain on Thursday, when data showed that initial jobless claims rose more than expected in the Dec. 6 week.

“The Fed’s ‘hawkish-but-bullish’ cut last night reinforces this: stronger 2026 growth, faster disinflation,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers. “Cuts are continuing, but they’re no longer automatic — and that’s usually a constructive backdrop for equities.”

In Asia, Thailand markets will be in focus after Prime Minister Anutin Charnvirakul moved to dissolve parliament, setting the stage for an early election after reports of a key political party backing his minority government moving to withdraw its support.

Elsewhere, copper climbed to a fresh record high on Thursday and most other industrial metals rose after the Fed move. Gold and silver edged lower in Asia on Friday after rising in the previous session. Oil rallied from its lowest close in almost two months and Bitcoin flip-flopped in a tight range around $92,500.

The tech sector continues to be on traders’ radar after dominating much of the recent market action following Oracle Corp.’s results — which brought worries about valuations and whether heavy spending on AI infrastructure will pay off back into focus.

While the sector has powered the global equities rally this year, overspending fears and lofty valuations have prompted some investors to rotate into other areas. Nvidia Corp. fell 1.6% on Thursday while the Magnificent Seven index of US tech giants dropped 0.6%.

“The effect of Oracle has been greater than the Fed. This already tells us everything as we’ve been witnessing a strong concentration and one theme — AI — leading the market,” said Alberto Tocchio, a portfolio manager at Kairos Partners. “This doesn’t mean that AI is gone or it’s a bubble, but we need to focus on a wider scale.”