Asian Shares Advance As Fed Tightening Concerns Ease
Asian stocks rallied on Monday, the dollar edged lower and U.S. Treasury yields fell amid signs that U.S. inflation may have peaked. China’s easing of COVID-19 curbs also boosted sentiment ahead of a meeting of European Union countries to agree on Russian oil import sanctions.
China’s Shanghai Composite index rose 0.6 percent to 3,149.06 as fewer COVID cases in Beijing and Shanghai led to easing of some restrictions. Risk appetite was also supported by stimulus measures announced by Shanghai authorities to support the economy. Hong Kong’s Hang Seng index jumped 2.06 percent to close at 21,123.93.
Japanese shares closed at over one-month high as machinery and technology stocks advanced on China growth optimism and easing concerns over excessive U.S. inflation.
The Nikkei average climbed 2.19 percent to 27,369.43, marking its highest close since April 21. The broader Topix index ended 1.86 percent higher at 1,922.44. Kubota Corp, Sony Group, Fanuc and Daikin Industries surged 4-7 percent. Shipping firms succumbed to selling pressure, with Mitsui O.S.K. Lines falling 3.1 percent.
Seoul stocks extended gains for a second straight session and the Korean won hit over one-month high on the back of growing appetite for riskier assets on hopes for economic recovery in China.
The Kospi average rallied 1.20 percent to finish at 2,669.66, with technology and auto stocks leading the surge. SK Hynix, Hyundai Motor and Samsung Electronics rose 1-2 percent.
Australian shares ended at over three-week high, led by gains in commodity stocks and technology firms. AGL Energy lost 1.7 percent after the country’s largest electricity generator dumped a controversial demerger plan and announced the exit of its top two executives.
The benchmark S&P/ASX 200 closed 1.45 percent higher at 7,286.60, its highest level since May 6. The broader All Ordinaries index rose 1.48 percent to 7,522.60.
New Zealand’s benchmark S&P/NZX 50 rose 0.73 percent to 11,145.50, posting its biggest single-day rise since May 18 after Paul Conway, the Reserve Bank’s new chief economist, said in an interview that the central bank could succeed in soft landing the economy.
U.S. stocks rose sharply on Friday to snap a seven-week losing streak amid bets that softening economic data and early signs that inflation may have peaked will eventually convince Fed officials to slow the pace of tightening in the second half of the year.
An inflation gauge closely tracked by the Federal Reserve slowed to 4.9 percent in April from 5.2 percent in March, indicating that price pressures could be easing a bit.
The Dow climbed 1.8 percent, the tech-heavy Nasdaq Composite jumped as much as 3.3 percent and the S&P 500 rallied 2.5 percent.
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