Asian markets surge on hopes of potential US interest rate cuts

Asian markets surged on Monday, following a positive performance on Wall Street, as data indicating a further slowdown in US inflation in June raised hopes that the Federal Reserve might cut interest rates.

The optimistic sentiment kicks off a busy week for traders, with key events including policy decisions from the central banks of the United States and Japan, a crucial US jobs report due on Friday, and earnings reports from major companies, News.Az reports citing AFP.

The gains helped claw back some of the hefty losses suffered last week after disappointing results from tech titans Tesla and Alphabet caused panic-selling among investors who had piled into the sector this year.

All three main indexes in New York jumped more than one percent Friday after the Fed's preferred gauge of inflation -- the personal consumption expenditures (PCE) index -- slowed to 2.5 percent last month.

Fed chief Jerome Powell sparked a rally in markets earlier in the month when he said decision-makers did not need to see the reading hit two percent before moving.

The bank is due to make an announcement Wednesday, ahead of the release of the closely watched non-farm payrolls report Friday.

Asian investors were in a buoyant mood at the beginning of the week.

Tokyo piled on two percent after eight days of losses, while Hong Kong, Sydney, Seoul, Singapore, Taipei and Manila were also up.

The Bank of Japan is also lined up to make an announcement Wednesday amid speculation it will hike rates again, having done so in March for the first time in 17 years as it shifts away from its ultra-loose policy.

Expectations for a rise, either this week or at the BoJ's next meeting, along with bets on a Fed cut have helped push the yen higher against the dollar after it hit a four-decade low near 162 per dollar at the start of the month.

Tokyo - Nikkei 225: UP 2.0 percent at 38,415.75 (break)

Hong Kong - Hang Seng Index: UP 1.1 percent at 17,210.90

Shanghai - Composite: UP 0.2 percent at 2,897.67

Dollar/yen: DOWN at 153.37 yen from 153.75 yen on Friday

Euro/dollar: UP at $1.0866 from $1.0859

Pound/dollar: UP at $1.2883 from $1.2875

Euro/pound: UP at 84.36 pence at 84.32 pence

West Texas Intermediate: DOWN 0.2 percent at $77.02 per barrel

Brent North Sea Crude: FLAT at $80.27 per barrel

New York - Dow: UP 1.6 percent at 40,589.34 (close)

London - FTSE 100: UP 1.2 percent at 8,285.71 (close)

News.Az