Asia report: Most markets rise on Fed rate cut hopes

(Sharecast News) - Asia-Pacific markets mostly advanced on Thursday, buoyed by gains on Wall Street after weaker US jobs data bolstered expectations of a Federal Reserve rate cut next week. US private-sector payrolls shrank by 32,000 in November, according to ADP, sharply reversing the 47,000 additions recorded in October and coming in well below economist forecasts.

Patrick Munnelly at TickMill said the negative ADP print "should eliminate any lingering doubts among Fed officials ahead of next week's meeting.

"Another 25 basis point rate cut is anticipated," he said, adding that while the ADP report is not as comprehensive as payroll data, "it serves as the best indicator available to the Fed before the FOMC meeting and reinforces the soft labour market conditions evident in other survey data."

The CME FedWatch tool showed traders pricing in an 89% probability of a cut at the Fed's 9-10 December meeting, a significant increase from earlier this month.

The bullish interest-rate outlook helped offset overnight weakness in US technology stocks, which were the biggest drag on the S&P 500.

Tokyo leads regional gains as automation firms jump

Japan led regional gains, with the Nikkei 225 surging 2.33% to 51,028.42 and the Topix climbing 1.92% to 3,398.21.

"Japanese markets stole the spotlight across Asia, with the country's stocks leading regional gains," said Munnelly, who noted that the move came after US economic data fuelled hopes for a rate cut.

Industrial automation firms were the standout performers, with Fanuc rising 12.98% and Yaskawa Electric advancing 11.37%.

Munnelly said demand dynamics were supported by Japanese bond markets, noting that "Japan's 30-year government bond auction attracted its strongest demand since 2019," adding that the successful long-end auction "builds on the momentum from a strong 10-year bond sale earlier in the week."

Renesas Electronics jumped 10.3% after reports that US-based SiTime Corporation is in talks to acquire Renesas's timing unit in a deal that could value the business at up to $2bn including debt.

Mainland shares more subdued, Seoul in the red

Chinese equities were subdued, with the Shanghai Composite slipping 0.06% to 3,875.79 as HPGC Renmintongtai Pharmaceutical, Joeone Co and Henan Dayou Energy fell 10.02%, 9.97% and 9.67%, respectively.

The Shenzhen Component gained 0.4% to 13,006.72.

Hong Kong markets fared better, with the Hang Seng Index rising 0.68% to 25,935.90.

WuXi Biologics surged 7.09% after signing a strategic agreement with Qatar Free Zones Authority to develop its first integrated CRDMO centre in the Middle East, while WuXi AppTec added 5.44% and Xiaomi climbed 4.38%.

South Korea bucked the regional trend, with the Kospi down 0.19% at 4,028.51.

Munnelly noted that "South Korea and Taiwan saw their indexes retreat, reversing two days of gains," despite broader regional strength.

Daesung Industrial dropped 12.84%, Century Company slid 11.11% and Rifa fell 8.66%.

Sydney rises on copper prices, Wellington in the red

In Australia, the S&P/ASX 200 gained 0.27% to 8,618.40 as miners tracked surging copper prices.

Capstone Copper Corporation rose 8.04%, Rio Tinto added 3.92% and Alcoa Corporation gained 3.88%.

London Metal Exchange copper futures jumped as much as 2.6% to above $11,400 per tonne amid a spike in withdrawal orders, before easing to around $11,100.

Across the Tasman Sea, New Zealand's S&P/NZX 50 declined 0.49% to 13,515.62, with Vital Healthcare Property Trust down 4.55%, Investore Property off 2.46% and Kiwi Property Group falling 2.31%.

Regional currencies mixed as oil prices rise

In currencies, the dollar weakened 0.41% against the yen to trade at JPY 154.61 and slipped 0.16% against the Aussie to AUD 1.5125, but gained 0.06% on the Kiwi to change hands at NZD 1.7329.

Munnelly said "the collar index held its ground after shedding 0.4% the previous day," noting that US Treasury yields fell across the curve, with two-year rates dipping to around 3.48%.

He added that elsewhere in Asia, "the Indian rupee hit an all-time low against the dollar, reflecting weak sentiment as trade negotiations with the US faced delays."

Oil prices edged higher, with Brent crude futures last up 0.35% on ICE at $62.89 per barrel, and the NYMEX quote for West Texas Intermediate advancing 0.51% to $59.25.

Reporting by Josh White for Sharecast.com.