Asian Markets Rally on US Shutdown Optimism
Asian stock markets opened strong on Monday, buoyed by growing optimism that a US government shutdown could be avoided. Major indices across the region posted significant gains, recovering from last week’s concerns over AI valuations.
Key Market Performance
- Hong Kong’s HSI: Gained 167 points (0.64%) to reach 26,409
- Japan’s Nikkei: Jumped 490 points (0.98%) to 50,766
- South Korea’s Kospi: Surged 2.8% (112 points) to 4,065
- Shanghai: Traded marginally higher with 2-point gain
- Shenzhen: Dipped 31 points to 13,372 at 8:40 AM IST
US Government Shutdown Developments
The US Senate moved closer to a vote on reopening the federal government on Sunday. Senate Majority Leader John Thune indicated that bipartisan talks have taken a positive turn, raising hopes for a resolution.
The ongoing shutdown has placed considerable strain on the US economy. Federal workers across airports, law enforcement, and the military have gone unpaid, while limited government reporting has reduced the central bank’s economic visibility.
White House economic adviser Kevin Hassett issued a stark warning, stating that the nation’s fourth-quarter GDP could turn negative if the shutdown persists.
Economic Indicators and Global Impact
Recent consumer sentiment data revealed growing concerns, showing a decline to near a three-and-a-half-year low in early November as households weighed the economic impact.
Despite these challenges, global risk appetite remained positive. European futures showed strong momentum with EUROSTOXX 50 and DAX futures both up 1.3%.
In bond markets, US treasury yields edged upward. The benchmark 10-year yield rose 3.5 basis points to 4.1278%, while the two-year yield increased roughly 3 basis points to 3.5886%.
The dollar recovered some ground from last week as investors balanced the economic outlook against expectations of a more hawkish Federal Reserve policy stance.
