Investing.com – UBS analysts have identified six key factors that will weigh on Asian markets in the second half of 2024, especially after several major developments in the first half of the year, including a historic rate hike in Japan and strong stimulus measures in China.
Asian equities have shown somewhat mixed performance in 2024. Although China and Japan initially posted strong growth, they appeared to have run out of steam by June. On the other hand, markets in India and South Korea thrived on economic optimism and hopes of a boom in technology demand.
UBS has identified six key factors that will influence Asian markets over the next six months.
In July, the brokerage expects the third plenum of the Chinese Communist Party, a key meeting of its political leaders, at which the country is likely to outline plans for additional stimulus measures, especially to support its struggling real estate market. The brokerage said this was positive for Chinese stocks.
UBS said in August that rising demand for artificial intelligence was expected to be reflected in record second-quarter earnings, with high-tech markets benefiting the most from the trend.
In September, the bank said it expected the US Federal Reserve to begin cutting interest rates, easing global monetary conditions and attracting more capital to regional markets. UBS also predicts that regional banks will begin to follow the Fed’s lead and ease policy, making local bonds more attractive.
In October, UBS outlined two factors: expectations for a strong, growth-fuelled fourth quarter. The brokerage also forecast that the Bank of Japan will raise interest rates for the second time this year within a month, which will help the yen recover against the dollar.
In November, the results of the US presidential election are likely to lay the groundwork for the policies of the world’s largest economy, as well as determine its position vis-à-vis major Asian economies.