Asian stocks surge after lower US inflation eases rate fears - Albuquerque Journal

Asian stocks surge after lower US inflation eases rate fears

BEIJING — Asian stock markets surged Friday after U.S. inflation eased by more than expected, spurring hopes the Federal Reserve might scale down plans for more interest rate hikes.

Hong Kong’s market benchmark jumped 5.4%. Seoul and Sydney rose almost 3%. Shanghai and Tokyo also advanced. Oil prices edged higher.

Wall Street’s benchmark S&P 500 index soared 5.5% on Thursday for its best day in 2 1/2 years after the government reported consumer prices rose 7.7% over a year ago in October. That was lower than the 8% expected by economists and the fourth month of decline.

The announcement “drove a ‘more dovish’ calibration of interest rate expectations,” said Yeap Jun Rong of IG in a report.

The Fed and central banks in Europe and Asia are raising rates to cool inflation that is at multi-decade highs. Investors worry they might tip the global economy into recession. They hope lower inflation might prompt the Fed to ease off plans for more increases.

Forecasters warned Thursday it was too early to be certain prices are under control. Fed officials have said rates might have to stay elevated for some time.

Hong Kong’s Hang Seng index soared to 16,948.96 and the Nikkei 225 in Tokyo gained 2.7% to 28,186.34.

The Shanghai Composite Index added 1.2% to 3,073.36 after the ruling Communist Party promised to alter quarantine and other anti-virus tactics to reduce the cost of China’s severe “zero-COVID” strategy that has disrupted the economy.

The Kospi in Seoul rose 2.8% to 2,471.10 and Sydney’s S&P-ASX 200 was 2.4% higher at 7,128.40. New Zealand, Singapore and Jakarta gained while Bangkok declined.

On Wall Street, the S&P gained to 3,956.37, propelled by big gains for tech heavyweights. Amazon soared 12.2%, Apple rose 8.9% and Microsoft climbed 8.2%.

The Dow Jones Industrial Average gained 3.7%, or more than 1,200 points, to 33,715.37.

The Nasdaq composite, dominated by tech stocks, shot up 7.4% to 11,114.15 for its best day since March 2020, when Wall Street was rebounding from a crash at the start of the coronavirus pandemic.

Investors were reassured that U.S. inflation was declining from its June peak of 9.1%, though forecasters said the Fed’s campaign to cool price rises was far from over.

Traders expect the Fed to raise its benchmark lending rate in December but by a smaller margin of half a percent following four increases of 0.75 percentage points, triple its usual margin. That benchmark stands at a range of 3.75% to 4%, up from close to zero in March.

The Fed is trying to slow economic activity to reduce pressure for prices to rise.

The latest figures are a sign the Fed is “on the right path,” but it will face “a lot of variables” over the next few quarters, said Edward Moya of Oanda in a report. He said the benchmark rate could be raised to 5% and “if inflation proves to be sticker, it could be as high as 5.50%.”

Core inflation, which strips out volatile food and energy prices and is more closely watched by the Fed, was 6.3% over a year earlier, down from September’s 6.6% and below the consensus forecast of 6.5%. Core prices rose 0.3% month on month, half of September’s 0.6% gain.

The yield on the 10-year Treasury, which helps set rates for mortgages and other loans, fell to 3.82% from 4.15%. The two-year yield, which more closely follows expectations for Fed action, fell to 4.32% from 4.62% and was on pace for its sharpest fall since 2008.

In energy markets, benchmark U.S. crude gained 29 cents to $86.76 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 64 cents to $86.47 on Thursday. Brent crude, the price basis for international oil trading, advanced 27 cents to $93.94 per barrel in London.

The dollar rose to 142.08 yen from Thursday’s 141.83 yen. The euro edged up to $1.0186 from $1.0180.

Home » Business » Money » Asian stocks surge after lower US inflation eases rate fears

Insert Question Legislature form in Legis only stories




Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email yourstory@abqjournal.com

taboola desktop

ABQjournal can get you answers in all pages

 

Questions about the Legislature?
Albuquerque Journal can get you answers
Email addresses are used solely for verification and to speed the verification process for repeat questioners.
1
Fed lifts rate by quarter-point but says inflation is ...
Money
WASHINGTON (AP) -- The Federal Reserve ... WASHINGTON (AP) -- The Federal Reserve extended its fight against high inflation Wednesday by raising its key interest rate a quarter-point, its eighth hike ...
2
Asian stocks higher ahead of Fed rate decision
Money
BC-Financial-Markets, 12th Ld-Writethru Eds: UPDATES: With ... BC-Financial-Markets, 12th Ld-Writethru Eds: UPDATES: With AP Photos. Asian stocks higher ahead of Fed rate decision By Joe Mcdonald Associated Press BEIJING (AP) -- ...
3
Lots of sound and fury on US debt, but ...
Money
WASHINGTON (AP) -- For all the ... WASHINGTON (AP) -- For all the sound and fury about raising the nation's debt limit, most economists say federal borrowing is not at a ...
4
Asian shares mixed on hopes for avoiding recession
Money
BEIJING (AP) -- Asian stock markets ... BEIJING (AP) -- Asian stock markets were mixed Thursday amid hopes Western economies can avoid a recession despite higher interest rates to cool inflation. ...
5
Budget proposal concerns NM water official
ABQnews Seeker
With a call for increased spending ... With a call for increased spending on water-related projects, but no more staff, it will be a struggle to carry out projects
6
Heinrich: $774K going to small business efforts
ABQnews Seeker
Federal funds from Omnibus Appropriations Agreement Federal funds from Omnibus Appropriations Agreement
7
Google axes 12,000 jobs as layoffs spread across tech ...
Money
LONDON (AP) -- Google is laying ... LONDON (AP) -- Google is laying off 12,000 workers, or about 6% of its workforce, becoming the latest tech company to trim staff as ...
8
Asian markets rise after Wall St losses amid recession ...
Money
BEIJING (AP) -- Asian stock markets ... BEIJING (AP) -- Asian stock markets rose Friday after Wall Street losses deepened as worries grow that the U.S. economy is headed for recession. ...
9
Wholesale inflation in US slowed further in December to ...
Money
WASHINGTON (AP) -- Wholesale prices in ... WASHINGTON (AP) -- Wholesale prices in the United States rose 6.2% in December from a year earlier, a sixth straight slowdown and a hopeful ...