SINGAPORE: Asian stocks rose on Tuesday to their highest in more than two and half years, heartened by broad stimulus measures from China while expectations for more U.S. rate cuts kept risk sentiment aloft and the dollar under pressure.
The moves sent Chinese stocks higher, with the blue-chip CSI300 Index rising 2.4%, while the Shanghai Composite index also gained 2.38%. Hong Kong's Hang Seng Index jumped over 3.2% to a four month high. Vasu Menon, managing director of investment strategy at OCBC, said questions remain on whether the latest measures are the silver bullet that will change the tide for the Chinese economy and stock market.
In a speech at a meeting with business leaders in Osaka on Tuesday, BOJ Governor Kazuo Ueda said it was appropriate to raise rates if trend inflation heighten in line with its forecast. Markets are currently evenly split on whether the U.S. central bank will go for another 50 bp cut or a 25 bp cut in November, CME Fedwatch tool showed. They are pricing in 76 bps of easing this year.