Morningstar: Valuation restructuring and AI momentum resonate; interest rate cut expectations ignite Asian growth engine.

According to ME News, on January 8th (UTC+8), Morningstar stated in its Q1 2026 outlook report that Asian equities are expected to continue their upward trend in 2026, supported by reasonable valuations. Analysts indicated that while occasional pullbacks are possible, a sustained correction appears unlikely. Global spending on artificial intelligence remains a core driver of earnings in the technology sector, and valuations for AI-benefiting stocks generally remain attractive. Morningstar anticipates the Federal Reserve will lower the federal funds rate, leading to lower interest rates in Asia, excluding Japan. Japan, on the other hand, may see a gradual increase in interest rates. The report added that geopolitical tensions remain a major risk, and the market may experience intermittent volatility. (Source: ME)