Hong Kong, June 13 (BNA): Asian stocks rose on Tuesday after an upbeat session on Wall Street, as investors turned their attention to key US inflation data and the Federal Reserve’s interest rate decision this week.
Investors will closely watch US consumer and producer inflation data on Tuesday and Wednesday, respectively, to read how well the Fed’s tightening cycle has curbed rising prices, Reuters reports.
Investors and strategists said that the gains in the stock index partly reflected expectations of the Federal Reserve to stop raising interest rates for the first time since January 2022, and for the two measures of inflation to come to less than the previous month.
“Equity markets have generally responded positively to expectations that the monetary policy cycle may be nearing its peak,” ANZ analysts said in a note. “US markets are now placing a 72% probability that the Federal Monetary Policy Committee (FOMC) will hold interest rates at this week’s meeting.”
European markets were preparing for a higher open, as across the region Euro Stoxx 50 futures rose 0.69%, German DAX futures rose 0.68% and FTSE futures rose 0.41%.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8% while US stock futures – S&P 500 e-minis – rose 0.22%.
Japan’s benchmark Nikkei average rose to a new three-decade high, propelled by a rally in technology stocks amid expectations of a flood of investment in chip-related companies. The Nikkei rose for the third consecutive session, up 1.89% in afternoon trade, and poised for its highest close since July 1990.
Australian shares rose 0.18%.
Chinese stocks recovered some losses after the central bank on Tuesday cut its short-term lending rate in an effort to restore market confidence. But economic concerns and geopolitical risks capped gains as recent Chinese economic data showed weak demand, dampening investor sentiment.
“I am afraid that China’s monetary policy will become increasingly ineffective, due to low confidence and weak demand for loans,” said Wang Qi, CEO of asset manager MegaTrust Investments. “While it would be nice to see more liquidity injected into the system, whether the private sector will leverage further is not clear.”
China’s CSI300 Super Index rose 0.11% in afternoon trade. Hong Kong’s Hang Seng Index rose 0.23%.
On Monday, the S&P 500 and the Nasdaq rose to their highest closing levels since April 2022.
The S&P 500, buoyed by gains in market heavyweights Amazon, Apple and Tesla, has recovered 21% from its October 2022 lows, heralding the start of a new bull market as identified by some market participants.
The S&P 500 index jumped 0.93%, ending the session at 4,338.93 points. The Nasdaq was up 1.53%, while the Dow Jones Industrial Average was up 0.56%.
While the Fed is expected to keep interest rates steady, the sudden hikes by the Reserve Bank of Australia and the Bank of Canada last week have kept investors alert to the idea of prolonged tightening cycles.
The European Central Bank will release its interest rate decision on Thursday as analysts expect to raise interest rates by 25 basis points and signal that there is more ground to cover. But the Bank of Japan, which will announce its plan on Friday, is expected to maintain its ultra-loose policy.
In US Treasuries, the yield on the benchmark 10-year Treasury came in at 3.7299%, compared to the US close of 3.765% on Monday. The two-year yield, which rose as traders expected a Fed funds rate hike, came in at 4.5605% compared to the US close of 4.592%.
In currencies, the US dollar index, which measures the greenback against a basket of major currencies, fell 0.21% to 103.36, while the euro rose 0.3% on the day at $1.0792.
The dollar fell 0.1 percent against the yen to 139.46.
US crude rose 0.33% to $67.34 a barrel. Brent crude rose to $72.2 a barrel.
Gold was a little higher. Spot gold was trading at $1,960.29 an ounce.
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