Hong Kong (AFP) – Seoul led gainers in Asian stocks Thursday as investors continued to push back into tech firms after a summer rout, with confidence boosted by easing US interest rate hike fears following data that showed inflation slowing last month. The consumer price index (CPI) report for July, which was in line with forecasts, followed figures pointing to a softer jobs market and gives the Federal Reserve room to keep borrowing costs on hold for now.
However, with the reading holding stubbornly above the bank’s two percent target for more than five years — and the Iran war keeping oil prices elevated — monetary policymakers are still expected to tighten at some point. “July marked 65 consecutive months with inflation running above target. Nevertheless, odds of a rate hike in September were pushed out by the US CPI report,” said Neil Wilson at Saxo Markets. “It looks as though this was soft enough for the market to give the Fed more time to sit around with inflation above target.”
He added that there were questions over whether Fed boss Kevin Warsh would match his inflation-busting rhetoric. “Stock futures are firmer, the dollar weaker, gold up… (the) prospect of no hike this year is going to support the bull case for equities.” A broadly positive day on Wall Street that saw the S&P 500 end with gains was followed by most of Asia.
South Korea’s Kospi surged almost five percent in the opening minutes amid a revival of the AI trade that fueled the market’s eye-watering surge to multiple records this year. The index lost 40 percent between hitting its last high and its recent trough. It has since rallied about 20 percent, putting it in a bear market. Chipmakers SK hynix and Samsung led the charge as they clawed back losses sustained in a sector-wide global rout from the end of June through July that wiped trillions of dollars off valuations.
That selloff was fueled by fears over the returns on vast sums invested in projects around the world, as well as traders being forced to liquidate bets as prices sank. Elsewhere in Asia, Tokyo, Shanghai, Wellington, and Taipei were all higher, though Hong Kong, Singapore, and Sydney dipped. The latest bounce has been helped by some bargain-buying and government measures to stabilize retail investor volatility, as well as strong earnings reports from market heavyweights including Amazon, Microsoft, and more recently CoreWeave.
Oil prices slipped more than one percent — bucking after six days of gains — as investors kept tabs on developments in the US-Iran crisis, with neither side showing signs of backing down and the Strait of Hormuz still shut.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 1.6 percent at 68,609.92 (break)
Hong Kong – Hang Seng Index: DOWN 0.2 percent at 25,398.72
Shanghai – Composite: UP 0.5 percent at 3,966.96
West Texas Intermediate: DOWN 1.2 percent at $82.25 per barrel
Brent North Sea Crude: DOWN 1.1 percent at $87.97 per barrel
Euro/dollar: UP at $1.1524 from $1.1522 on Wednesday
Pound/dollar: DOWN at $1.3490 from $1.3491
Dollar/yen: DOWN at 159.42 yen from 159.50 yen
Euro/pound: UP at 85.42 pence from 85.40 pence
New York – DOW: FLAT at 53,770.27 (close)
London – FTSE 100: DOWN 0.1 percent at 10,833.15 (close)
© 2024 AFP
