Markets watch: Asian stocks gain on US budget deal hopes; crude steadies on demand outlook

Asian equities edged higher on Wednesday following signs that the US government shutdown could end soon and amid data pointing to a cooling jobs market, which has raised expectations of a Federal Reserve interest rate cut.

Markets, however, remain cautious on technology stocks after a year of strong AI-driven gains.In early Asian trade, major indices rose, with Tokyo’s Nikkei 225 up 0.2% at 50,927, Hong Kong’s Hang Seng climbing 1.1% to 26,984, and Shanghai’s Composite adding 0.3% to 4,015, as per news agency AFP. Despite the overall positive trend, technology stocks faced pressure after Japanese investor SoftBank sold its entire stake in US chipmaker Nvidia for $5.8 billion, leading to a 3% drop in Nvidia shares and a 10% fall in SoftBank’s Tokyo listing.After the Senate approved a temporary spending bill, the US House of Representatives is set to vote, with President Donald Trump expected to sign the legislation, potentially reopening government services as early as Friday. The shutdown, which began on October 1, left a million federal workers unpaid and delayed key economic data, complicating the Fed’s policy decisions.Private payroll data from ADP showed US companies shed an average of 11,250 jobs per week in the four weeks ending October 25, highlighting weakness in the labour market and increasing bets on a Fed rate cut in December, reported Bloomberg.

Outplacement firm Challenger, Gray & Christmas also reported that October saw the highest level of layoffs in 22 years.Oil prices were largely steady, following gains in the previous session, as traders weighed potential demand increases from a reopening of the US government. Brent crude slipped 8 cents to $65.08 a barrel, while US West Texas Intermediate fell 7 cents to $60.97, reported Reuters. Analysts noted that restoring government operations could boost consumer confidence, travel, and jet fuel demand ahead of the holiday season.On the supply side, US sanctions on Russian oil producers, including Lukoil and Rosneft, continue to influence global markets, prompting some Chinese refiners to seek non-Russian crude and schedule maintenance disruptions, according to Reuters.Currency and bond markets reflected cautious optimism. The euro dipped to $1.1579, the pound fell to $1.3143, and the dollar strengthened against the yen to 154.37, while US 10-year Treasury yields fell to 4.08% on expectations of looser monetary policy, as per Bloomberg.Asian investors are now monitoring the House vote in Washington closely, with a potential government reopening seen as a key catalyst for equities and crude demand in the near term.