Global Markets React Mixed to US Fed Rate Cut

Stock markets were uneven on Monday as investors paused following last week’s rally sparked by the US Federal Reserve’s decision to cut interest rates.
Tokyo led the gains after the Bank of Japan clarified that it would gradually sell its massive holdings of exchange-traded funds. The central bank had initially unsettled markets on Friday by announcing plans to offload the assets as part of its shift away from ultra-loose monetary policy. Analysts now expect the sell-down to take decades, easing immediate concerns.
Positive sentiment also stemmed from talks between former US President Donald Trump and Chinese leader Xi Jinping, which Trump said produced “progress on many very important issues,” including discussions on TikTok. He added that the two would meet again at the Asia-Pacific Economic Cooperation summit in South Korea next month, with a visit to China planned for next year. Economists said the dialogue, though lacking detail, helped support a sense of detente between the two powers.
Equities have risen in recent months on expectations that the US central bank will continue lowering borrowing costs, with concerns about a softening labour market outweighing inflationary pressures.
On Monday, Tokyo’s Nikkei rose one per cent, while gains were also seen in Shanghai, Sydney, Seoul, and Taipei. However, markets in Hong Kong, Singapore, Wellington, Manila, Bangkok, and Jakarta slipped.
In India, Mumbai edged lower as the country’s $283 billion technology sector came under pressure following Trump’s order imposing a $100,000 annual fee on new H-1B skilled worker visas. Shares in Tata Consultancy Services fell three per cent, while Infosys lost 2.7 per cent.
European markets were also subdued, with London, Paris, and Frankfurt closing in the red.