Global stock markets started the week on a stronger footing, with Japanese equities leading the gains across Asia. Japan's benchmark Nikkei 225 jumped 2.4% on October 5, briefly moving above the psychologically important 70,000 level during the trading session. The index touched an intraday high of 70,072.13 before ending the day at 69,946.86, up 1,637.40 points. The move came as investors became less concerned about the possibility of another US Federal Reserve rate hike this month following weaker-than-expected US employment data..
Why Did Global Stocks Rise?
A major factor behind Monday's positive sentiment was the latest US labour-market data. Slower job growth reduced expectations that the Federal Reserve would need to raise interest rates again in October. Markets were pricing in only an 18% probability of an October rate hike, sharply lower than the previous week's 64%, according to Reuters. Lower expectations for additional rate increases can support equities because higher interest rates generally increase borrowing costs and can make bonds relatively more attractive than stocks. The shift in expectations therefore provided some relief to global equity markets..
Nikkei 225 Crosses 70,000
Japan's Nikkei was the standout performer among major Asian markets. The index climbed as much as 2.53% to 70,037.61 during Monday's session according to market reporting, before finishing at 69,946.86. The official Nikkei data shows the session high at 70,072.13. The index's rise was supported in part by strong performances from technology and AI-related companies. Nikkei's official data shows the technology sector accounted for the largest contribution to the day's advance, while companies including Advantest and Tokyo Electron were among the index's largest-weighted technology stocks..
AI Stocks Add to Japan's Rally
The renewed interest in artificial intelligence-related companies also helped Japanese technology shares. Stocks linked to semiconductor manufacturing and AI infrastructure have remained an important part of the Japanese market's recent performance. Gains in companies such as Tokyo Electron and other technology names helped lift the broader Nikkei index. The rally also reflects the continued global investor interest in companies expected to benefit from spending on AI chips, data centres and related infrastructure..
What Happened in Other Global Markets?
The positive mood was not limited to Japan. MSCI's broadest index of Asia-Pacific shares outside Japan gained around 1.2%, while European markets were more mixed later in the session. US stock futures were little changed, suggesting investors were waiting for further economic data and corporate developments before making larger moves. Trading was thinner in some Asian markets because stock exchanges in China and South Korea were closed for holidays..
Oil Prices Move Lower
The global stock market gains came alongside a decline in crude oil prices. Brent crude fell to around $100.95 per barrel, while US crude declined to approximately $89.57. Rising Middle East crude exports and plans by G7 countries to release emergency oil stocks helped ease some immediate supply concerns. Lower oil prices can be positive for oil-importing economies because they can reduce pressure on inflation and import costs. For countries such as India and Japan, this can be an important factor for the broader economic outlook..
What Does This Mean for Indian Investors?
Global market movements often influence Indian equities through foreign investor flows, currency movements and overall risk sentiment. A stronger Asian market backdrop can provide some support to Indian stocks, particularly when global investors become less worried about US interest rates. However, India's market has its own domestic factors to consider, including the RBI's monetary policy decision, crude oil prices, the rupee and foreign institutional flows. So while the Nikkei's jump is a positive global signal, it does not automatically mean that the Sensex and Nifty will follow the same path throughout the trading session..
What Investors Should Watch Next
Markets will remain focused on upcoming US economic data, Federal Reserve expectations, global bond yields, crude oil prices and corporate earnings. In Japan, investors will also watch the country's bond market and policy signals as the 30-year Japanese government bond yield recently reached a record high. For global equities, the key question is whether easing expectations around US rate hikes can continue to support risk appetite or whether high bond yields and geopolitical risks bring volatility back. For now, Monday's session has given global investors a more positive start to the week, with Japan's Nikkei once again taking centre stage..