Asian stocks advanced on Wednesday as weak U.S. data released overnight boosted expectations of a less hawkish Federal Reserve.
Investors are pricing in a smaller interest rate hike in December after a 75 basis point increase in November. Third-quarter U.S. GDP data, due later this week, is expected to offer more clues on the economic and rate outlook.
Regional stocks gave up some early gains in the wake of unexpectedly weak earnings from technology giants Alphabet and Microsoft.
Chinese and Hong Kong stocks rose notably, recovering further from a sharp sell-off earlier this week on concerns that President Xi Jinping will continue with his ideology-driven approach at the cost of economic growth.
China’s Shanghai Composite Index advanced 0.8 percent to 2,999.50, while Hong Kong’s Hang Seng Index gained 1.0 percent to close at 15,317.67.
Japanese shares rose for the third consecutive session to reach a seven-week high. The Nikkei 225 Index climbed 0.7 percent to 27,431.84, while the broader Topix ended 0.6 percent higher at 1,918.21.
Denka shares surged 6.4 percent after the chemical products manufacturer announced it would exit its cement business. Shipping companies led losses, with Mitsui O.S.K. Lines and Kawasaki Kisen Kaisha both falling around 3 percent.
The Japanese yen continued weakening against the dollar as traders extended beets against currency market intervention by the government. Yields fell sharply after the Bank of Japan again said it would increase bond buying operations.
Seoul stocks gained on hopes for slower U.S. rate hikes. The Kospi rose 0.7 percent to 2,249.56. Samsung Electronics and Samsung SDI both jumped about 3 percent. Battery maker LG Energy Solution surged 3.5 percent after reporting a turnaround in the third-quarter earnings.
Australian markets ended off their day’s highs after data showed inflation reached a 32-year high last quarter, pointing to more economic ructions and putting additional pressure on the Reserve Bank to raise interest rates further.
The benchmark S&P/ASX 200 Index inched up 0.2 percent to 6,810.90, while the broader All Ordinaries Index closed 0.2 percent higher at 7,005.10.
Coles Group, the second-largest supermarket chain in the country, fell 2.7 percent after it flagged rising cost pressures due to elevated inflation and adverse weather.
Across the Tasman Sea, New Zealand’s benchmark S&P NZX-50 Index rallied 1.3 percent to 11,046.50.
Overnight, U.S. stocks rallied to score a three-day winning streak after a sharp pullback by Treasury yields and better than expected third quarter earnings from the likes of General Motors and Coca-Cola.
The Dow rose 1.1 percent, the tech-heavy Nasdaq Composite jumped 2.3 percent and the S&P 500 added 1.6 percent to reach their best closing levels in over a month as weak data on housing prices and consumer confidence stoked hopes the Fed will slow its aggressive pace of interest rate hikes.
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