Asian Shares Rise On Powell’s Dovish Tilt, Easing China Curbs

Asian stocks rose notably on Thursday after Federal Reserve Chair Jerome Powell hinted at slowing the pace of rate hikes and the giant Chinese cities of Guangzhou and Chongqing announced an easing of Covid curbs in the wake of nationwide rallies calling for an end to lockdowns.

China’s Shanghai Composite Index rose 0.5 percent to 3,165.47 after Vice Premier Sun Chunlan said the Omicron variant was weakening and vaccination rates were improving.

The relaxing of some anti-Covid measures in China also boosted hopes that China would soon reopen its economy. Hong Kong’s Hang Seng Index hit a two-month high before closing 0.8 percent higher at 18,736.44.

Japanese shares posted strong gains after data showed domestic firms ramped up capital spending at their fastest pace in over four years in the third quarter.

The Nikkei 225 Index advanced 0.9 percent to 28,226.08, snapping a four-day losing streak. The broader Topix finished marginally higher at 1,986.46.

Chip-related shares such as Advantest, Tokyo Electron and Screen Holdings jumped 3-4 percent, tracking an overnight surge by the Philadelphia Semiconductor index.

Heavyweight SoftBank Group gained 1.6 percent, while Eisai spiked 4.8 percent to extend gains from the previous session.

Seoul stocks ended off their day’s highs after data showed the country logged in a trade deficit for the eighth straight month in November on high global energy prices. The Kospi ended 0.3 percent higher at 2,479.84 – extending gains for a third day running.

Australian markets rose for a third straight session, with miners leading the surge on optimism over a Chinese demand recovery. The benchmark S&P/ASX 200 Index jumped 1.0 percent to 7,354.40, while the broader All Ordinaries Index gained 1.0 percent to settle at 7,554.

Investors shrugged off data showing that Australian business investment unexpectedly dipped in the third quarter.

Across the Tasman, New Zealand’s benchmark NZX-50 Index climbed 0.9 percent to 11,654.56.

U.S. stocks rallied overnight and recorded their first back-to-back monthly gains since 2021 after Powell indicated the central bank might moderate the pace of rate increases as soon as December.

At the same time, Powell noted that restoring price stability will require holding policy at a restrictive level for some time until signs of progress emerge on inflation.

Economic data painted a mixed picture, with private payrolls growth slowing in November and third-quarter GDP growth revised up to 2.9 percent from 2.6 percent.

The Dow jumped 2.2 percent to hit a new seven-month closing high, while the tech-heavy Nasdaq Composite and the S&P 500 surged 4.4 percent and 3.1 percent, respectively, to reach their best closing levels in over two months.

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