Asian markets opened Tuesday on a broadly positive note, driven by rising expectations of imminent U.S. Federal Reserve rate cuts, while Australia’s ASX slipped at the start of trading amid weakness in the banking sector. The divergence highlighted how local economic conditions continue to shape investor sentiment across the region.
Asia rallies on rate cut bets
Across Asia, equities gained as weak U.S. labour market data reinforced the prospect of the Fed easing monetary policy before year-end. The MSCI Asia-Pacific index, excluding Japan, climbed around 0.8%, reflecting widespread optimism.
Japan’s Nikkei 225 rose 0.3%, helped by a softer yen and political developments following the resignation of Prime Minister Shigeru Ishiba. In South Korea, the Kospi added 0.6%, while Hong Kong’s Hang Seng outperformed with a 1.2% surge, buoyed by tech and property shares.
In India, the Gift Nifty signalled a firm start, trading near 24,950 compared to the previous close of around 24,773. Analysts pointed to continued foreign inflows and stable corporate earnings as supportive factors.
Australia bucks the trend
In contrast, the S&P/ASX 200 opened down 0.5%. Major banks dragged the index lower, with ANZ under pressure after announcing sweeping job cuts affecting about 4,500 positions. While miners provided some offset, banking sector weakness dominated early sentiment.
Investors also remained cautious ahead of domestic economic data releases later in the week, with inflation and wage growth figures expected to provide further direction.
Fed’s role in market direction
The key driver across Asia was the shifting outlook for U.S. rates. Traders increasingly expect up to three cuts before the end of 2025, a move seen as supportive for global liquidity and emerging-market equities.
Market watchers noted that while the Fed’s policy stance is fuelling optimism, local dynamics—from Japan’s political shifts to Australia’s labour market restructuring—continue to set the tone for individual exchanges.
REFH – Newshub, 9 September 2025
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