Asian Shares Rise After Powell’s Comments, Record ECB Rate Hike

Asian stocks rose on Friday as investors digested Federal Reserve Chair Jerome Powell and ECB President Christine Lagarde’s comments advocating for higher rates to combat runaway inflation.

Chinese shares finished notably higher as data showed inflation slowed more than expected in August. The benchmark Shanghai Composite Index advanced 0.8 percent to 3,262.05, while Hong Kong’s Hang Seng Index rallied 2.7 percent to 19,362.25.

China’s consumer inflation rose an annual 2.5 percent in August, the National Bureau of Statistics said earlier today. That was shy of forecasts for 2.8 percent and down from 2.7 percent in July.

The bureau also said that producer prices were up 2.3 percent year-on-year, below forecasts for 3.1 percent and down sharply from the 4.2 percent gain a month earlier.

Japanese shares advanced, led by gains in the energy and healthcare sectors. The Nikkei 225 Index gained 0.5 percent to close at 28,214.75, while the broader Topix ended 0.4 percent higher at 1,965.53.

South Korea’s financial markets were closed for a local holiday.

Australian markets extended gains for a second day running and closed at their highest level this month, with mining and energy stocks leading the surge.

The benchmark S&P/ASX 200 Index rose 0.7 percent to 6,894.20, while the broader All Ordinaries Index climbed 0.8 percent to settle at 7,139. Mining heavyweights BHP and Rio Tinto rose around 3 percent each as iron ore prices hit two-week highs.

Woodside Energy and Santos rose over 1 percent in the oil & gas sector. Gold miners outperformed, with Newcrest jumping nearly 4 percent. Mineral Resources soared 13.6 percent on reports of a potential demerger of its lithium operations.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX-50 Index climbed 0.7 percent to 11,757.77 as Fonterra revised its 2023 earnings forecast. Fonterra Shareholders’ Fund Units surged 4.3 percent.

U.S. stocks ended a choppy session higher overnight despite Powell reiterating the central bank’s commitment to aggressively fight inflation to bring it back down to 2 percent.

The Dow and the tech-heavy Nasdaq Composite both gained around 0.6 percent, while the S&P 500 added 0.7 percent.

Elsewhere, the European Central Bank raised its key interest rates by an unprecedented 75 basis points and signaled further tightening in the coming months to tackle record inflation.

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