Bullish Momentum Carries Asian Markets as Rate-Cut Bets Surge

Global equity markets are signaling renewed optimism heading into Thursday’s trading, with the South Korean benchmark poised to extend its winning streak. The KOSPI has demonstrated solid upside momentum, gaining approximately 115 points or 2.9 percent over consecutive sessions and currently trading above the 3,960-point level.

Wall Street Sets Positive Tone for Region

The catalyst driving this rally stems from shifting interest rate expectations. CME Group’s FedWatch Tool shows the probability of a quarter-point rate cut next month has jumped dramatically to 82.9 percent from just 30.1 percent a week prior, representing a significant repricing of monetary policy expectations. This development has lifted sentiment across equity markets globally, with major U.S. indices closing decisively in positive territory.

The Dow Jones Industrial Average added 314.67 points or 0.67 percent to settle at 47,427.12, while the S&P 500 climbed 46.73 points or 0.69 percent to 6,812.61. The NASDAQ saw particularly strong performance, surging 189.10 points or 0.82 percent to reach 23,214.69. This reversal marks a notable shift from the valuation-driven selloff that had previously pushed major indices to their lowest levels in over two months.

Seoul Markets Capitalize on Financial and Tech Strength

The KOSPI reflected this positive external backdrop on Wednesday, advancing 103.09 points or 2.67 percent to close at 3,960.87. Financial sector stocks, technology names, and industrial issues all contributed to the upside, with trading volume reaching 291.5 million shares worth 15.6 trillion won. Advancing issues significantly outnumbered declines, with 771 gainers compared to 125 losers. For investors seeking exposure to South Korean equities, KOSPI ETF instruments have become increasingly accessible vehicles to capture this market strength.

Supporting Economic Backdrop

U.S. economic data provided additional support for risk sentiment. The Commerce Department released data showing new orders for durable goods exceeded expectations in September, signaling continued manufacturing demand. Meanwhile, first-time unemployment benefit claims posted an unexpected decline last week, suggesting labor market resilience despite economic headwinds.

Energy markets also rallied as traders reassessed geopolitical dynamics, with West Texas Intermediate crude climbing $0.61 or 1.05 percent to $58.56 per barrel on doubts surrounding a potential Russia-Ukraine peace proposal.

Policy Decision Awaits

The Bank of Korea is scheduled to conclude its monetary policy deliberations Thursday morning and announce its interest rate decision. Market consensus expects the central bank to maintain its benchmark lending rate at 2.50 percent, though the broader trajectory toward potential global rate reductions continues to support risk assets across the region.

With this backdrop of external support and positive technical positioning, the KOSPI appears well-positioned to sustain its upward momentum heading into the weekend.