Asian Shares Advance As Fed Worries Ease

Asian shares edged higher on Thursday after the U.S. Federal Reserve said the “disinflationary process has started” but “ongoing increases” in interest rates will be needed to curb price pressures.

Fed Chair Jerome Powell’s dovish comments in a press conference stoked expectations that the Fed might start cutting rates before 2024.

Both the European Central Bank and the Bank of England are expected to hike interest rates by 50 basis points each later in the day.

Chinese shares ended little changed as investors awaited a slew of earnings from prominent firms in the coming weeks.

The benchmark Shanghai Composite Index finished marginally higher at 3,285.67 after a volatile session. Hong Kong’s Hang Seng Index slipped 0.5 percent to 21,958.36.

Japanese shares ended a tad higher despite a stronger yen weighing on exporters. The Nikkei 225 Index inched up 0.2 percent to 27,402.05, with technology stocks leading the uptick. The broader Topix ended 0.4 percent lower at 1,965.17.

Tokyo Electron, Screen Holdings and Advantest jumped 3-4 percent. Technology investor SoftBank Group added 1 percent and Uniqlo brand owner Fast Retailing gained 2.5 percent.

Automakers Honda Motor, Toyota Motor and Nissan fell 1-2 percent. Sumitomo Chemical plunged 8.5 percent after cutting its full-year earnings guidance.

Seoul stocks ended notably higher, with the Kospi climbing 0.7 percent to 2,468.88, led by tech stocks. Samsung Electronics soared 2.8 percent and SK Hynix rallied 2.2 percent.

Investors shrugged off data showing that South Korean consumer inflation ticked up in January to a three-month high.

Australian markets rose slightly as firmer bullion prices boosted gold miners. Tech stocks also jumped, while energy stocks fell, tracking lower oil prices.

The benchmark S&P/ASX 200 Index edged up 0.1 percent to 7,511.60 and the broader All Ordinaries index closed 0.2 percent higher at 7,728.50.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.5 percent to 12,152.16.

U.S. stocks rallied overnight to close at their highest level since last summer, the dollar extended losses and Treasury yields fell after the Fed raised rates by 25 basis point, as widely expected, and said “ongoing increases” in rates will be appropriate.

Fed Chair Jerome Powell acknowledged that inflation was starting to ease and that financial conditions had tightened significantly over the past year.

In economic releases, private payrolls growth slowed in January, while manufacturing contracted for the third consecutive month, separate reports showed.

The Dow inched up marginally, while the tech-heavy Nasdaq Composite jumped 2 percent and the S&P 500 surged 1.1 percent.

Source: Read Full Article