Asian Stocks Echo Wall Street Rally On Fed's Quarter-Point Cut

Stocks in the Asia-Pacific region extended weekly gains following a rally in Wall Street as the Federal Reserve cut interest rates by 25 basis, in line with expectations.

Equity benchmarks in South Korea and Australia led the advances during the session. The Nikkei was 310 points, or 0.8%, higher at 39,706, while the Kospi was up 26 points, or 1%, at 2,589 as of 5:35 a.m.

Stocks in China finished at their highest level in about a month on Thursday, on robust exports data and hopes of further stimulus overshadowing concerns over tariff hikes by Donald Trump.

China's Standing Committee of the National People’s Congress will wrap up its meeting that started on Monday, with investors eyeing further fiscal measures during the announcement.

Meanwhile, stocks in the US hit another all-time high along with a surge in bonds and commodities as Jerome Powell delivered its second rate cut as expected by market participants.

The labour market conditions have "generally eased" since earlier in the year and the unemployment rate has moved up but remains low, the FOMC statement said. "Inflation has made progress toward the committee's 2% objective but remains somewhat elevated."

Jerome Powell acknowledged that lowering rates too quickly could hinder progress in reducing inflation. Similarly, cutting rates too slowly “could unduly weaken economic activity and employment," he said. "We are not in a pre-set course."

Further, Chair Jerome Powell said he won’t step down even if Donald Trump asks him to leave, and that the demotion of vice chairs isn’t permitted under the law.

The S&P 500 notched its 49th record this year, and the Nasdaq hit fresh highs for the second consecutive session. The S&P 500 and the tech-heavy Nasdaq Composite advanced 0.74% and 1.51%, respectively, while the Dow Jones Industrial Average remained flat.

The 10-year yield fell 11 basis points after a shart rally on Wednesday as investors rethink the magnitude of the upcoming Trump-induced inflation.

Meanwhile, analysts foresee that India will benefit from any tariff hikes by the US as they would have the most adverse impact on economic rival China.

On the commodity front, crude oil prices were set for a weekly advance as traders assessed the potential impact of crude supplies under the new US president. Brent crude was trading 0.95% higher at $75.63 a barrel as of 6:00 a.m. IST. West Texas Intermediate was down 0.26% at $72.17.