Asian stocks were on the front foot on Wednesday with investor mood lifted by more positive signals from the US on rate easing, while hints of increased economic stimulus from Beijing helped too.
Strong earnings in South Korea also had an impact across the region, as the dollar beat a retreat on a shift in tone from Federal Reserve officials on US interest rate expectations.
Japan’s Nikkei share average closed at its highest level in two weeks as chip stocks led a rally on bets for some easing on rate hikes in the world’s No1 economy.
Also on AF: Hong Kong Battles to Boost Appeal, Business After Clampdown
The tech-heavy Nikkei ended the day up 0.60% at 31,936.51, building on Tuesday’s 2.4% surge. It had earlier pushed as high as 32,037.07, crossing the psychological 32,000 line for the first time since October 2. The broader Topix was down 0.19%, or 4.35 points, to 2,307.84.
Overnight, the tech-focused Nasdaq led gains among Wall Street’s big three indexes, and the Philadephia SE Semiconductor Index advanced 1.3%.
Atlanta Fed Bank President Raphael Bostic said on Tuesday the central bank did not need to raise borrowing costs any further, and Minneapolis Fed President Neel Kashkari followed with similar remarks later in the day.
Long-term Treasury yields, whose months-long surge had fuelled jitters across asset classes, continued their decline from the 16-year highs reached last week.
China stocks rose, tracking global markets higher, while a media report saying Beijing is preparing new stimulus to help meet this year’s official growth target also helped sentiment.
There were also improving signs in the geopolitical front. China’s Commerce Minister Wang Wentao and US senators led by Senate Majority Leader Chuck Schumer held “rational and pragmatic” discussions on Monday, the Chinese commerce ministry said.
The blue-chip CSI 300 Index climbed 0.28% and the Shanghai Composite Index added 0.12%, or 3.72 points, to close at 3,078.96. The Shenzhen Composite Index on China’s second exchange was ahead 0.29%, or 5.52 points, to 1,906.85.
Shares in healthcare, artificial intelligence and communications rose between 2% and 2.6% to lead the gains.
Hong Kong Developers Drop
Meanwhile, real estate developers, energy and tourism firms dropped between 1% and 1.5% and tech giants listed in Hong Kong rose 2.1%.
Hong Kong’s Hang Seng Index advanced 1.29%, or 228.37 points, to 17,893.10, and the Hang Seng China Enterprises Index rose 1.33%.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Wellington, Mumbai, Bangkok, Taipei and Jakarta were all up. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5% to head for its best session in 10 weeks.
Across the Pacific, several Fed official noted that recent rises in longer-term yields may help do their inflation-fighting work.
Atlanta Fed President Raphael Bostic was applauded when he told a room full of bankers in Nashville on Tuesday: “I actually don’t think we need to increase rates anymore.”
Bond markets were stable through the Asia session, with benchmark 10-year Treasury yields at 4.65% – some 24 basis points below Friday’s 16-year peak. Thirty-year yields, which poked above 5% last week fell 2 bps to 4.81%.
Oil Prices Steady
In commodity markets oil prices have steadied since Monday’s bounce on concern that Palestinian militants’ surprise attack on Israel could spark a wider conflict. Brent futures traded at $87.90 a barrel, after hitting $89 on Monday.
European gas prices, which had jumped on news of the Middle East violence, have surged further on concern a gas pipe in Finland was sabotaged.
Elsewhere in foreign exchange trade, the yen has clung to a small bounce made as the Middle East tension has supported safe-haven assets, last trading at 148.94 per dollar.
US stock futures were steady and European futures hovered where cash trade left off on Tuesday.
A European Central Bank survey on inflation expectations is due later on Wednesday. Later in the week, the US earnings season hits full swing with big banks’ profits seen rising.
Key figures
Tokyo – Nikkei 225 > UP 0.60% at 31,936.51 (close)
Hong Kong – Hang Seng Index > UP 1.29% at 17,893.10 (close)
Shanghai – Composite > UP 0.12% at 3,078.96 (close)
London – FTSE 100 > UP 0.04% at 7,631.53 (0933 BST)
New York – Dow > UP 0.40% at 33,739.30 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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