Asian stocks are set for gains, following a robust quarter for US equities fueled by artificial intelligence. The Nikkei in Japan is projected for a record 36% rise for the quarter, while South Korea's Kospi gained an impressive 65% and Taiwan's benchmark is up over 40%. The MSCI All-World index saw its best quarterly performance since 2020, rising 14.5%, and emerging market stocks climbed 23%. This tech-driven rally, particularly in semiconductor companies, has led to unusual investor behavior, with significant rebalancing and profit-taking by foreign investors in Asia's tech-heavy markets, despite strong performance.
The dollar continued its upward trend, achieving its fourth consecutive quarterly rise against a basket of currencies. This strength pushed the Japanese yen to a 40-year low of 162.41 per dollar, prompting Finance Minister Satsuki Katayama to issue warnings about potential market intervention. Gold experienced its largest quarterly fall in over a decade, dropping 14%, largely due to the dollar's appreciation and expectations of Federal Reserve interest rate hikes. The Fed's latest projections show nine of 19 policymakers anticipating a rate hike by year-end, driven by strong US economic growth and persistent inflationary pressures.
Energy markets saw significant shifts, with Brent crude futures plummeting nearly 40% over the past three months, settling at $72.92 per barrel. This marks Brent's largest quarterly drop since 2020 and its third consecutive monthly decline. The decline is attributed to reduced geopolitical tensions as hostilities between the US and Iran eased into a fragile ceasefire, and the gradual reopening of the Strait of Hormuz. Conversely, Europe's STOXX index is set for a 9% rise this quarter, and China's mainland blue-chip CSI300 is up about 10%, highlighting varied global market performance.
