(Sharecast News) - Asia-Pacific equity markets advanced on Wednesday, mirroring gains on Wall Street as investors grew more confident that the US Federal Reserve could cut interest rates in December.
Sentiment strengthened after Bloomberg reported that White House National Economic Council director Kevin Hassett was the frontrunner to become the next Fed chair, a move seen as increasing the likelihood of a dovish pivot favoured by president Donald Trump.
"Stocks climbed while the Dollar took a hit as weak US consumer data and the emergence of a pro-rate-cutting candidate as the likely Federal Reserve chairman fuelled expectations of an imminent reduction in interest rates," noted Patrick Munnelly at TickMill.
Treasury secretary Scott Bessent told CNBC there was a "very good chance" Trump could announce a nomination before Christmas, while New York Fed president John Williams said on Friday that there was room to lower rates "in the near term."
Markets were pricing in more than an 84% probability of a December rate cut, according to the CME FedWatch tool, boosting risk appetite across the region.
Munnelly noted that "Asian markets surged by 1.4%, buoyed by Wall Street's rally, and the positive momentum seemed set to continue, with S&P 500 and European futures pointing to further gains."
Tokyo leads gains after Wall Street surge
Japan led regional gains, with the Nikkei 225 rising 1.85% to 49,559.07.
Shares of Toppan Holdings surged 6.27%, while SoftBank Group and Sumitomo Pharma climbed 5.65% and 5.24%, respectively.
The broader Topix index advanced 1.96% to 3,355.50, supported by strength in the utilities, real estate and financial sectors.
Munnelly said "the MSCI All Country World Index continued its recovery for a fourth consecutive day, trimming its losses from this month's market selloff to just 1.3%," reinforcing the broader improvement in global sentiment feeding through to Asia.
Mainland Chinese markets were mixed.
The Shanghai Composite slipped 0.15% to 3,864.18, dragged lower by sharp losses in Lanzhou LS Heavy Equipment, CSSC Offshore & Marine Engineering Group and Joeone Co, which declined 9.85%, 9.34% and 8.39%, respectively.
The Shenzhen Component rose 1.02% to 12,907.83.
In Hong Kong, the Hang Seng Index edged up 0.13% to 25,928.08, driven by a 5.65% gain in Meituan and a 4.24% rise in ZTO Express Cayman.
ZTO Express was in focus as its US-listed shares rose overnight, after CICC said the firm's single-ticket profit improved in the third quarter and raised its target price by 9%, maintaining an 'outperform' rating.
Shenzhou International Group also rose 3.2%.
South Korea's Kospi jumped 2.67% to 3,960.87, led by outsized moves in Charm Engineering, SBW and Koas, which advanced 13.07%, 11.29% and 11.17%, respectively.
Economic data painted a mixed picture in Korea - the Business Survey Index for the manufacturing sector climbed to 70 in November from 68 in October, while production rose to 80 from 79.
However, new orders slipped to 76 from 77, inventories fell to 102 from 104 and the financial situation index eased to 79 from 82.
The Economic Sentiment Index declined to 94.1, signalling a modest weakening in overall confidence.
Sydney, Wellington in the green on economic data, RBNZ cut
Australia's S&P/ASX 200 gained 0.81% to 8,606.50, lifted by National Storage REIT, which soared 19.47% after confirming a non-binding AUD 4bn (1.97bn) takeover proposal from Brookfield and GIC at AUD 2.86 per stapled security.
Mesoblast rallied 14.29% after confirming US FDA approval for Ryoncil, transitioning the company towards commercial sales, while Abacus Storage King gained 9.32%.
Inflation data added complexity to the policy outlook - Australia's consumer price index rose 3.8% year on year in October, its fastest pace in seven months and above economists' 3.6% estimate.
Housing costs surged 5.9%, electricity prices jumped 37.1% as rebates were exhausted, and the trimmed mean measure of core inflation edged up to 3.3% from 3.2%.
Separate data showed total construction work done fell 0.7% in the September quarter to AUD 79.28bn.
Across the Tasman Sea, New Zealand's S&P/NZX 50 advanced 0.61% to 13,562.01, buoyed by a 4.63% gain in Fisher & Paykel Healthcare after the company reported a sharp rise in first-half revenue and profit.
Vista Group International and Tourism Holdings rose 2.75% and 2.05%, respectively.
The Reserve Bank of New Zealand cut its official cash rate by 25 basis points to 2.25%, the lowest since mid-2022, but signalled an end to its easing cycle.
Dollar weakens against its Australasian counterparts, oil little changed
In currency markets, the dollar gained 0.27% on the yen to trade at JPY 156.47, while it fell 0.36% against the Aussie to AUD 1.5403 and weakened 0.84% on the Kiwi to NZD 1.7640.
"The dollar weakened against most of its group-of-10 counterparts, while gold, often seen as a safe haven in times of rate cuts, gained 0.9%, reaching $4,166 per ounce," Munnelly said.
Oil prices were little changed, with Brent crude futures last down 0.1% on ICE at $62.42 per barrel, and the NYMEX quote for West Texas Intermediate fractionally higher at $57.96.
Reporting by Josh White for Sharecast.com.
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