Global Equities Surge Amid US Chip Stock Rebound and Japanese Election Victory

Global equities soared on Monday, driven by a rebound in US chip stocks and Japanese Prime Minister Takaichi's election triumph. Markets showed optimism, expecting Federal Reserve policy easing. Tokyo shares hit record highs, and Japan's prospect of fiscal expansion elevated investor sentiment.

Global equities soared on Monday, buoyed by a rebound in U.S. chip stocks and a decisive election victory for Japanese Prime Minister Sanae Takaichi, which propelled Tokyo shares to unprecedented highs. Bargain hunting in previously hit markets like silver, bitcoin, and tech stocks, alongside expectations of further Federal Reserve policy easing, enhanced overall market sentiment and exerted downward pressure on the dollar.

Anticipation is mounting around a potential June rate cut, as upcoming U.S. economic data on jobs, inflation, and spending are expected to reinforce the need for stimulus. A Bloomberg report suggesting China's directive to banks to limit U.S. Treasury exposure further pressured the dollar and bumped up Treasury yields slightly. In Japan, the Nikkei index surged 3.9%, setting all-time records as the ruling LDP party's substantial win opens doors to increased spending and tax cuts.

Meanwhile, European and American markets experienced mixed reactions. Europe's STOXX 600 index inched towards record heights, while S&P 500 and Nasdaq futures saw minor dips, reflecting ongoing concerns about hefty investments in AI and associated uncertainties. As the week unfolds, U.S. economic data will prove crucial in shaping forecasts for monetary policy.

(With inputs from agencies.)