© Reuters.
By Ambar Warrick
Investing.com– Asian stocks surged on Tuesday amid hopes that a weakening U.S. economy would push the Fed into reducing its hawkish tone, while the partial withdrawal of the UK’s contentious tax plan also aided sentiment.
Japan’s index jumped 2.8%, while the Index and South Korea’s rose over 2% each. Yield-sensitive technology stocks marked strong gains.
Australia’s index was the best performer for the day, rallying nearly 4% after the Reserve Bank . The bank signaled that while it will keep raising rates, it will also attempt to strike a balance between tightening policy and ensuring that economic growth remains steady.
The Australian dollar also plummeted after the RBA’s move, benefiting export-heavy industries such as mining and consumer goods. Australian bank stocks also rose on the prospect of higher interest rates on lending.
Trading volumes in Asia were thinned by a week-long holiday in China and Hong Kong. But markets took a , which rallied strongly overnight.
Weak U.S. and data drove up hopes that the Fed will taper its pace of interest rate hikes sooner than signaled. But a slew of Fed officials have indicated that the central bank intends to risk economic pain in its fight against inflation.
Still, the retreated for a fourth session, while also fell from a 12-year peak, easing pressure on risk-driven assets.
Sentiment was also boosted after the UK , which had raised widespread concerns over Britain’s fiscal health. The also recovered further from a record low hit last month.
But while Asian stocks recovered on Tuesday, they were still trading near annual lows, as fears of a hawkish Fed and weakening economic growth weighed heavily this year.
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