Asian stock markets mostly rise as cooler U.S. inflation reading inspires ‘risk-on’ buying

  • Written by MarketWatch
  • Published in Economics

The past week’s global stock rebound continued in the Asia Pacific region on Friday, following on fresh gains in the U.S. as worries about aggressively higher interest rates eased.

A report showing a weaker-than-expected increase for U.S. consumer prices in April[1] helped push the dollar DXY, -0.02%[2]   and bond yields lower[3] after recent gains, cooling concerns of a more-aggressive pace of rate increases from the Federal Reserve.

“The inflation reading is a positive setup” for Asian equities, said James Cheo, a senior investment strategist at Bank of Singapore, providing investors “some reassurance” that inflation remains well checked.

Gains of more than 0.5% were seen early in many Asia-Pacific stock indexes, with Japan’s Nikkei Stock Average NIK, +0.90%[4]   up 0.8% despite the dollar’s decline. The WSJ Dollar Index BUXX, +0.01%[5]   drop was the biggest in seven weeks. A stronger yen USDJPY, +0.02%[6]   often pressures Japanese stocks lower.

Meanwhile, Singapore’s Straits Times Index STI, +0.24%[7]   rose 0.5% following Thursday’s underperformance in the wake of a surprise opposition win in elections in neighboring Malaysia. Markets there remain closed until Monday; a U.S.-listed exchange-traded fund of Malaysian stocks [8]rebounded 1.8% following a 6% plunge Wednesday.

Around the region, China’s Shanghai Composite SHCOMP, +0.01%[9]  slipped 0.1%. Hong Kong’s Hang Seng HSI, +1.39%[10]  was up 0.9%. In Australia, its leading stock average  XJO, +0.31%[11]  rose 0.3%.

Oil futures CLM8, -0.01%[12]   were little changed in Asia after hitting their highest levels in more than three years[13] Thursday....

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