Beijing, Nov 11 (BNA): Asian stock markets rose on Friday after inflation in the United States eased more than expected, raising hopes that the Federal Reserve may cut plans for further interest rate hikes.
The Hong Kong market index jumped 5.4%. And Sydney and torrential prices are up about 3%. Shanghai and Tokyo also advanced. Oil prices are up, according to the Associated Press.
Wall Street’s benchmark S&P 500 index rose 5.5% Thursday, its best day in two and a half years after the government announced that consumer prices rose 7.7% from a year ago in October. That was less than the 8% economists had expected and the fourth month of decline.
“The announcement led to a ‘more pessimistic’ calibration of interest rate expectations,” IG’s Yeap Jun Rong said in a report.
The Federal Reserve and central banks in Europe and Asia are raising interest rates to cool multi-decade inflation.
Investors are worried that they could push the global economy into recession. They are hopeful that lower inflation will prompt the Fed to water down its plans for further increases.
Forecasters warned Thursday that it is too early to be sure prices are under control. Federal Reserve officials said interest rates may remain high for some time.
Hong Kong’s Hang Seng rose to 16,948.96 and Tokyo’s Nikkei 225 rose 2.7% to 28,186.34.
The Shanghai Composite added 1.2% to 3073.36 after the ruling Communist Party promised to change quarantine and other antiviral tactics to reduce the cost of China’s aggressive “zero COVID” strategy that has disrupted the economy.
Seoul’s Kospi rose 2.8% to 2471.10, and Sydney’s S&P-ASX 200 rose 2.4% to 7,128.40. New Zealand, Singapore and Jakarta prices rose while Bangkok prices fell.
On Wall Street, the S&P rose to 3,956.37, led by big gains for technology heavyweights. Amazon shares jumped 12.2 percent, Apple 8.9 percent and Microsoft 8.2 percent.
The Dow Jones Industrial Average rose 3.7% or more from 1,200 points to 33,715.37.
The Nasdaq Composite Index, which is dominated by technology stocks, rose 7.4% to 11114.15 on its best day since March 2020, when Wall Street was recovering from the crash at the start of the coronavirus pandemic.
Core inflation, which strips out volatile food and energy prices and is closely watched by the Federal Reserve, was 6.3% from a year earlier, down from 6.6% in September and below expectations of 6.5%. Core prices rose 0.3% month over month, and halved the 0.6% gain in September.
Traders expect the Fed to raise its benchmark lending rate in December but by a smaller margin of half a percent after four increases of 0.75 percentage points, three times its usual margin. This indicator stands in the range of 3.75% to 4%, up from nearly zero in March.
The yield on the 10-year Treasury, which helps determine rates for mortgages and other loans, fell to 3.82% from 4.15%. The two-year yield, which closely follows expectations for Fed action, fell to 4.32% from 4.62% and was on track for its biggest drop since 2008.
In energy markets, benchmark US crude rose 29 cents to $86.76 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 64 cents to $86.47 on Thursday. Brent crude, the price basis for international oil trade, rose 27 cents to $93.94 a barrel in London.
The dollar rose to 142.08 yen from 141.83 yen on Thursday. The euro rose to $1.0186 from $1.0180.
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