Asian Stocks Gain While European Markets Lag amid Fed Rate Cut Optimism

Markets in Asia largely closed higher, buoyed by last week’s record highs on Wall Street, while European benchmarks opened weaker Monday. The contrast reflected growing investor confidence in potential additional rate cuts from the U.S. Federal Reserve, tempered by concern over whether those cuts will materialize as hoped.
Japan’s Nikkei 225 jumped about 1.0%, bouncing back from last week’s decline caused by worries over the Bank of Japan’s asset holdings. Australia’s S&P/ASX 200 and South Korea’s Kospi similarly posted gains of roughly 0.4% and 0.7%, respectively. Meanwhile, Hong Kong’s Hang Seng dropped nearly 0.8%, in sharp contrast to the modest 0.2% rise in China’s Shanghai Composite. Across Europe, France’s CAC 40 slipped marginally, Germany’s DAX lost around 0.6%, and Britain’s FTSE 100 was virtually flat.
Investors are banking on further easing from the Fed following its first interest rate reduction this September. Federal Reserve statements have raised expectations for more cuts, though some warn that failure to deliver could trigger market setbacks. Key themes now include “Fed easing expectations,” “Asian equity strength,” “European market underperformance,” and “rate cut risk.” These are likely to dominate financial news and investor sentiment in the coming weeks.