Investing.com — UBS analysts have identified six key factors that will drive Asian markets in the second half of 2024, following several big events in the first half of the year, including Japan’s historic interest rate hike and China’s massive economic stimulus package.
Asian stocks have had a somewhat mixed performance so far in 2024. China and Japan saw initial big gains but saw momentum run out by June, while Indian and South Korean markets have thrived on economic optimism and hopes of a surge in technology demand.
UBS outlined six key factors that will drive Asian markets over the next six months.
The firm is looking ahead to the upcoming Third Plenary Session of the Communist Party of China in July, where the Chinese government is likely to unveil plans for further stimulus measures, particularly for the struggling property market.
UBS said in August that growing demand for artificial intelligence (AI) is expected to be reflected in strong second-quarter earnings, a trend that would benefit the tech-heavy market the most.
In September, UBS said it expects the Federal Reserve to start cutting interest rates, easing global financial conditions and encouraging more capital inflows into regional markets. UBS also predicts that regional banks will follow the Fed’s lead and ease policy, making regional bonds more attractive.
UBS outlined two factors in October. The first was hopes of a strong and growing start to the fourth quarter. The firm also predicted that the Bank of Japan would raise interest rates for the second time this year later this month, helping the yen recover against the dollar.
The outcome of the US presidential election in November will determine the policy foundations of the world’s largest economy and will also shape its stance towards major Asian economies.
