Asian stocks extend gains on trade hopes as Nikkei nears record

Reuters

24-07-2025

SINGAPORE, July 24 (Reuters) - Stocks in Asia extended gains on Thursday as optimism on Wall Street over trade deals and corporate earnings shored up investor confidence across the region, while the euro was steady ahead of European Central Bank policy meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab was up 0.4%, hitting a near four-year peak after U.S. stocks ended the previous session at a record high.
The bullish mood is set to continue in Europe. The pan-European futures were up 1.17%, German DAX futures were up 1.15% and FTSE futures were up 0.39%.
Tokyo's broad Topix gauge of shares (.TOPX), opens new tab and Singapore's benchmark index (.STI), opens new tab both crossed above previous highs, while the Nikkei 225 (.N225), opens new tab extended Wednesday's gains to within reach of its record high hit last year.
Traders are speculating that the U.S. may soon reach a trade agreement with the European Union, after the Trump administration struck deals with Japan, the Philippines and Indonesia earlier this week.
"There's nothing like a trade deal with a big trading nation - and deals with the Philippines and Indonesia, and the prospect of a deal in the offing for Europe - for markets to throw away all their caution," NAB's senior market strategist Gavin Friend said on a podcast. "Yields are higher and everything seems rosy at the moment."
Markets were relatively subdued after the White House said that U.S. President Donald Trump will visit the Federal Reserve on Thursday, a surprise move that escalates tension between the administration and Chair Jerome Powell. The Fed is expected to hold rates steady next week.
"The purpose of Trump's visit to the Fed is unclear but it may be a move to pressure Powell and the Fed to cut rates and it comes just a few days before the next Fed policy meeting at the end of this month," said Vasu Menon, managing director of investment strategy at OCBC.
The yield on benchmark 10-year Treasury notes was steady at 4.3937%. The two-year yield , which rises with traders' expectations of higher Fed fund rates, touched 3.8908%.
The dollar dropped 0.31% against the yen to 146.03 . It is still some distance from its low this year of 139.89 in April. The euro last fetched $1.1774, after hitting a more than two-week high earlier in the session.
The dollar index , which tracks the greenback against a basket of currencies of other major trading partners, was down at 97.156. The gauge has dropped over 10% this year as investors scurry for alternatives in the wake of Trump's erratic trade policies.
Second-quarter earnings are well underway, with 23% of the companies in the S&P 500 having reported. Of those, 85% have beaten Wall Street expectations, according to LSEG data.
In Asia, South Korean chipmaker SK Hynix (000660.KS), opens new tab and India's Infosys (INFY.NS), opens new tab provided rosy outlooks in their latest earnings reports, shrugging off U.S. trade uncertainty.
Investors will watch out for the policy decision from the ECB later on Thursday as trade talks between Washington and Brussels continue. The central bank is expected to keep interest rates on hold, pausing after seven straight cuts.
Investors generally expect one more ECB rate cut by the end of the year, most likely in December.
Trump has threatened to impose a 30% duty on EU goods but two diplomats said on Wednesday the EU and the U.S. were heading towards a deal that would result in a broad tariff of 15% applying to EU goods.
Oil prices rose on speculation the trade deal would support global growth and after a sharper-than-expected decline in U.S. crude inventories. U.S. crude ticked up 0.52% to $65.59 a barrel.
Gold was slightly lower as easing trade tensions dented demand for safe-haven assets, overshadowing support from a weaker dollar. Spot gold was traded at $3,382.79 per ounce.