Asia Market Wrap - Nikkei Tops 50000 for the First Time
Most Read: Markets Weekly Outlook - Trump-Xi Meeting, Earnings & Central Banks
Global stock markets continued their record-breaking rally, fueled by the belief that the US and China are close to a trade deal.
Top officials from the US and China have reportedly agreed on several major points in their trade talks. This progress makes it likely that Presidents Donald Trump and Xi Jinping can now finalize a trade deal, which would be a welcome relief for global markets.
Showing confidence in a deal, China's state media encouraged both countries to protect the positive progress made in recent discussions before the critical meeting between the two leaders.
Japan Highlights
Historic Highs: Japan’s main stock index, the Nikkei 225, closed above the 50,000 level for the first time ever on Monday, continuing a series of record highs.
The Numbers: The Nikkei jumped 2.46% to close at 50,512.32, marking a 26.6% gain so far this year.
The Driver: This surge is largely driven by expectations that Japan's new Prime Minister, Sanae Takaichi, will introduce major economic spending plans. The Nikkei has risen 2.5% since her election last week.
Key Stock Movers
The rally was also boosted by strong expectations for US AI companies like Nvidia.
SoftBank Group, a major tech investor, rose 6.66%, giving the Nikkei its biggest lift.
Companies connected to the AI boom also soared, including Advantest (a chip-testing equipment maker for Nvidia), which jumped 6.53%, and Fujikura (which makes optical fiber for data centers), which rose nearly 8%.
European Session - European Shares Hit Record-Highs
European stock markets hit a new record high on Monday, continuing the strong run from last week, as optimism over the US and China nearing a trade deal encouraged investors to take on more risk.
The main STOXX 600 index rose 0.1%, following its record close on Friday. This positive mood came after US President Donald Trump said the two sides are poised to "come away with" a trade deal at his planned meeting with the Chinese President later this week in South Korea.
In terms of sectors, mining and technology stocks both saw gains of 1.1%. Looking ahead, the US Federal Reserve is widely expected to cut interest rates by 0.25% at its meeting on Wednesday, a move supported by a weaker-than-expected US inflation report last Friday. In contrast, the European Central Bank is expected to keep its rates unchanged.
In company news, Swiss drugmaker Novartis lost 1% after announcing a $12 billion cash deal to buy U.S. firm Avidity Biosciences.
Meanwhile, HSBC Holdings fell 1.3% after revealing it must set aside $1.1 billion in its third-quarter results due to losing an appeal in a lawsuit related to the Madoff Ponzi scheme.
On the FX front, the US Dollar rose to its highest level against the Japanese yen in over two weeks on Monday.
Japanese Yen Weakens: The yen was the primary loser, falling to record lows against both the Euro and the Swiss Franc. The Dollar rose 0.1% against the yen.
Australian Dollar Rises: The Australian Dollar climbed 0.4% as positive news about U.S.-China trade talks increased investor appetite for riskier currencies.
Euro and Pound Stable: The Euro was steady against the Dollar, but hit an all-time high against the yen. The British Pound strengthened slightly (0.1%) against the Dollar.
Overall Dollar: The main US Dollar index was largely unchanged.
Currency Power Balance
Source: OANDA Labs
Gold prices dropped on Monday because two factors reduced the need for the safe-haven metal.
First, the US. Dollar grew stronger, which makes gold more expensive for foreign buyers. Second, positive signs that the US and China are moving toward a trade agreement eased global worries.
As a result, spot gold was down 0.8%, with investors now looking ahead to the central bank meetings scheduled later this week for new policy direction.
Oil prices rose on Monday as positive developments in the US-China trade talks eased concerns about global economic growth.
This small rise followed the significant jump in prices last week, where Brent crude rose 8.9% and US West Texas Intermediate crude rose 7.7% due to the new US and EU sanctions on Russia.
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Economic Calendar and Final Thoughts
Markets are optimistic once more following the announcement of a potential framework for a US-China deal. As more news filters through, volatility may spike occasionally.
Markets are eagerly awaiting US earnings and the Federal Reserve meeting on Wednesday. Both events have the ability to shape market moves in Q4.
Before that though, later today we have Durable goods order data which should give us some insight into the overall US economy.
For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)
Chart of the Day - FTSE 100 Index
From a technical standpoint, the FTSE 100 has retreated this morning folling the fresh all-time highs on Friday.
Immediate support rests at 9610 before the 9575 and 9550 handles come into focus.
Immediate resistance is provided at 9675, 9700 and 97225 respectively.
FTSE 100 Index Daily Chart, October 27. 2025
Source: TradingView.com (click to enlarge)
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