Fed decision, Japan tankan, Australia PMI

Australia’s unemployment rate dropped to 3.7% in February, compared with 4.1% in the prior month and lower than the 4% estimated by economists in a Reuters poll.

The country’s bureau of statistics said that this was due to a larger-than-usual number of people who were waiting to start or to return to jobs from December and January.

Employment numbers also beat expectations in February, with the number of employed people increasing by 116,500, compared to the 40,000 increase expected in the Reuters poll and the revised 15,300 climb in January.

— Lim Hui Jie

Business confidence at big Japanese firms jumped to a three-month high in March, according to the monthly Reuters Tankan survey released on Thursday.

The Reuters Tankan survey is a key gauge for the Bank of Japan’s quarterly Tankan survey that is scheduled to be released on April 1. Services-sector mood jumped to a seven-month high.

The Reuters survey showed manufacturers’ sentiment index was at +10 in March from -1 in the prior month, while the service sector index was at +32 compared with +26 in February.

The Bank of Japan raised interest rates for the first time since 2007 on Tuesday, ending the world’s only negative rates regime.

— Reuters, Shreyashi Sanyal

Japan’s Nikkei 225 index hit a new record on Wednesday, rising as much as 40,642.89 and surpassing its all-time closing high of 40,109.23.

The rally was powered by consumer cyclicals and industrial stocks, and also came on the back an improved business sentiment in Japan, as well as better exports data for February.

The top gainer on the index was semiconductor firm Sumco Corp which gained 5.42%, followed by financial technology firm Rakuten Group, which was up 3.65%.

A new class of highly effective weight loss medications could deal a blow to several major Swiss food companies while benefiting others, according to Vontobel.

The drugs, which imitate the effects of the GLP-1 hormone to reduce appetite and calorie intake dramatically, are showing remarkable efficacy in clinical trials. As a result, patients lose up to 25% of their body weight on average.

Vontobel said a baked goods maker and a chocolate giant could lose out on the rising trend, affecting their stock. Both are traded over the counter in the U.S.

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— Ganesh Rao

New Zealand slipped into a technical recession last year as the country’s gross domestic product contracted by 0.1% in the fourth quarter of 2023 compared to the quarter before.

This was a surprise contraction as economists polled by Reuters had expected 0.1% growth.

The contraction followed a 0.3% fall in GDP in the quarter ending September 2023, which meant that the country has experienced two successive quarters of contraction — the commonly accepted definition of a technical recession.

On a year-on-year basis, GDP in New Zealand expanded 0.6%, slowing from the 1.3% growth recorded in the third quarter.

— Lim Hui Jie

Stocks rallied this afternoon after the Federal Reserve announced it would keep rates steady in March but the Fed’s dot plot revealed plans for three rate cuts in 2024.

“The immediate market reaction is the relief we were expecting. Investors were worrying the Fed was going to pull back from rate cuts this year, so keeping three rate cuts on the table naturally pushes stocks higher and bonds yields lower,” said Bryce Doty, a portfolio manager at Sit Investment Associates.

Doty added that it’s a positive sign for investors to see that the Fed understands that it can still cut rates without compromising its tough stance on ifnlation.

— Lisa Kailai Han

Technology and small-cap stocks notably outperformed in afternoon trading as traders responded to the latest updates from the Federal Reserve.

The small-cap focused Russell 2000 climbed 1.5% shortly after 3 p.m. ET, while the technology-heavy Nasdaq Composite added around 1%. By comparison, the broad S&P 500 and blue-chip Dow rose just about 0.7% and 0.8%, respectively.

— Alex Harring