Singapore, Feb. 23 (BNA): Asian stock markets gained on Thursday after better-than-expected earnings in chip giant Nvidia helped the sector in Taiwan and South Korea offset concerns that strong economic data so far this year is a harbinger of further price rally.
MSCI’s broadest index of Asia-Pacific shares outside Japan touched its lowest level since January 6 in early trading, but rose about 0.7% as the day began, according to Reuters.
Nasdaq futures are up nearly 9% in after-hours trading.
Shares of the Taiwanese semiconductor manufacturing giant rose 2.2%, bringing the Taiwanese index up 1.3%. SK Hynix’s gains of 4% and Samsung’s 2% led South Korea’s Kospi up 1%.
The currencies of both South Korea and Taiwan rose sharply.
“The semiconductor sector has been turbulent, but signs of recovery are starting to pick up,” said Kyung Seung, chief Asia macro strategist at Societe Generale in Hong Kong. “Markets are ready for a rebound in the second half of this year, so anything that supports that is good for prices.”
The Bank of Korea also provided some relief by ending a year of continuous interest rate hikes with a temporary halt – as expected.
FX trade eased due to the holiday in Japan but the drift was in keeping with the broader mood – sending the greenback slightly lower in favor of riskier currencies.
The Australian and New Zealand dollars bounced around 0.5% against the greenback, pushing the Australian dollar to $0.6842 and the New Zealand dollar to $0.6251. The euro hovered around 1.0622 dollars and the yen at 134.77 per dollar.
The Singapore dollar fell slightly after inflation accelerated a bit slower than expected.
The resumption of Japanese trade on Friday could be bumpy as Japanese CPI data are due and investors – who speculate a policy shift is imminent – will prepare ahead of a parliamentary appearance by incoming central bank governor Kazuo Ueda. Treasury notes were not traded due to Thursday’s holiday.
The signs elsewhere were less reassuring as a string of strong economic data this year has investors worried that interest rates will need to continue to rise and remain high to rein in inflation.
Oil posted sharp losses on Wednesday, and Brent crude futures clung to support around $80 a barrel on Thursday.
The results season led to stock moves in Australia. Qantas Airways reported record first half profits, but shares suffered their biggest drop in a year – down 7.3% – after the company warned of possible lower prices.
Wall Street fell overnight and looked forward to its worst week of the year so far as stronger-than-expected US employment, inflation, retail sales and manufacturing numbers kept traders on interest rates higher for longer.
Minutes from this month’s Federal Reserve meeting – reinforcing the hawkish tone – did little to change anxiety.
“Markets have had to re-price interest rate expectations, not only higher, but also question the view that once rates peak, central banks will quickly pivot to cut rates,” said ANZ economist Finn Robinson.
“The economic resilience is commendable,” he said.
“But central banks are not comfortable with the current levels of aggregate spending and labor market demand… If upcoming data for February for the US confirms strong economic activity, it is difficult to see how risks will recover in the near term.”
Gold settled at $1,825 an ounce.
European inflation and final growth data in the US are due later in the day, although no major revisions to the preliminary numbers are expected. Fed officials Mary Daley and Raphael Bostick are scheduled to appear later on Thursday.
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