The Fed rate cut, followed by the Chinese central bank announcing several measures to support the slowing economy, positively impacted the Asian markets. Almost all major Asian indices are trading with a positive bias.
However, if the US economy fails to recover strongly following the massive 50 basis point rate cut, the Asian market will suffer as recessionary fears grow.
Nikkie 225
The Nikkei 225 has recovered its lost ground and has been trading with positive momentum for the last few weeks on the back of improved investors’ sentiment.
In the last 5 days, the index has gained nearly 4%, moving closer to its all-time high level. The Jibun Bank Services PMI rose from 53.7 in August to 53.9 in September. In contrast, the Jibun Bank Manufacturing PMI dropped from 49.8 to 49.6 in September. Also, the input cost inflation eased across the private sector.
Looking at the daily chart of the Nikkei 225 index, we can see that the index is trying to move higher but is currently experiencing strong resistance at the 38,000 level. If it succeeds in breaking higher, the next major resistance is at the 39,000 level.
The 20-day EMA slope is providing immediate support to the index. If it breaks below the slope, the 37,000 level will be its next support level.
Contributions from all sectors, particularly Finance, Producer Manufacturing, Consumer Durables, Technology Services, Electronic Technology, and the Process Industry, are helping the market increase.
The following are the top gainers in the last week.
| Stocks | Last 7 Days Gains (in %) |
| Fanuc Corporation | 11.81 |
| Hitachi | 10.80 |
| Mitsubishi Heavy Industries | 10.20 |
| Toyota | 8.75 |
| Daikin Industries | 8.40 |
Hang Seng
The People’s Bank of China (PBoC) has reduced the Reserve Requirement Ratio by 50 basis points. In addition, it has lowered lending rates on existing mortgages to help China’s struggling real estate market.
Furthermore, the PBoC stated that it may take additional measures to support the economy. These policy measures are expected to further support and revitalize the economy, increasing demand for mainland Chinese and Hong Kong-listed stocks.
The Hang Seng index is trading with strong positive momentum because of the US Fed rate cut and the rate cut in China. In the last five trading sessions, it has moved up nearly 10%.
The daily chart shows that the index is trading closer to its all-time high level, which is experiencing some resistance. Given the positive sentiment in the broader global market, the strong momentum in the Hong Kong market will likely persist.
All sectors and components of the Hang Seng index, including finance, energy minerals, retail trade, transportation, and technology services, contribute to its rally.
The following are the top gainers from the last week.
| Stocks | Last 7 Days Gains (in %) |
| China Merchants Bank Co Ltd | 22.41 |
| Ping An Insurance(Group)co.of China | 20.34 |
| Haier Smart Home Co Ltd | 18.87 |
| Zijin Mining Group Co.ltd | 16.62 |
| Nongfu Spring Co Ltd | 16.02 |
Nifty 50
The Nifty 50 index continued to trade bullishly, closing at a new all-time high of 25,940 but failing to break above the psychologically important 26,000 level. Expectations of additional rate cuts in the United States and China’s stimulus announcement drive the market higher. On the sectoral front, finance, metal, oil and gas, and power stocks are driving the index higher.
The daily chart of the Nifty 50 shows that the index is trading close to its all-time high and attempting to move higher. Overall, the 20-day EMA slope provides immediate support to the market. If the market attempts to test for support below 25,500, the index will likely find strong support at this level.
The top contributors to the index include Finance, Consumer Non-Durables, and Utilities, which all support the index’s move higher. Meanwhile, IT stocks are pulling the market down.
The following are the top gainers in the last one week.
| Stocks | Last 7 Days Gains (in %) |
| Mahindra & Mahindra | 10.13 |
| Bajaj Auto | 6.08 |
| Bharti Airtel | 6.40 |
| Nestle India | 5.26 |
| Power Grid | 5.09 |
The following are the top losers in the last one week across various sectors:
| Stocks | Last 7 Days Loss (in %) |
| TCS | 5.71 |
| Grasim | 5.41 |
| Infosys | 3.15 |
| Asian Paints | 2.51 |
| Wipro | 1.86 |
Conclusion
Optimism about a rate cut in the United States and China’s stimulus announcements push the market higher. However, uncertainties remain, as if economies fail to recover following central bank actions, another wave of market selloffs is expected. Investors should exercise caution and closely monitor economic indicators and central bank actions in the coming weeks.
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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
