Asia’s stock indexes rose on Tuesday, following a surge in tech stocks on Wall Street. Investors are eagerly awaiting the release of U.S. inflation data later this week, which could provide insight into potential interest rate cuts by the Federal Reserve.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.5%, with Australian shares climbing 1.17% and Japan’s Nikkei stock index trading 1.6% higher. Australia’s S&P/ASX200 saw a boost after November retail sales grew by 2% month on month, exceeding expectations.
Hong Kong’s Hang Seng Index increased by 0.26%, while China’s bluechip CSI300 Index fell 0.21%.
The dollar declined 0.21% against the yen, although it remains below its recent high. Tokyo core inflation data for December showed a slowdown for the second consecutive month, which could reduce pressure on the Bank of Japan to tighten monetary policy.
In currency markets, the euro was up 0.1% against the dollar, while the dollar index, which tracks the greenback against major trading partners, was down.
On Monday, the Dow Jones Industrial Average rose 0.58%, the S&P500 gained 1.41%, and the Nasdaq climbed 2.2% driven by strong performance in U.S. tech stocks.
The yield on benchmark 10-year Treasury notes rose to 4.0267% in early trade on Tuesday.
Looking ahead, December’s U.S. Consumer Price Index (CPI) reading will be published on Thursday and is expected to show a 0.2% increase in monthly headline inflation and a 3.2% rise on an annual basis.
While market expectations for an early rate cut are high with a 50% chance of a cut in March, economists at ANZ expect the Federal Reserve to be patient and seek greater certainty before implementing a cutting cycle.
U.S. crude oil prices saw a slight increase, while gold remained relatively stable.
As global investors await the U.S. inflation data, Asian markets are experiencing gains, fueled by a positive performance on Wall Street. The outcome of the data will provide insights into potential interest rate cuts by the Federal Reserve. Market players remain cautious and anticipate the Fed’s cautious approach to monetary policy. Meanwhile, the performance of tech stocks in the U.S. has contributed to the overall positive sentiment in Asian stock markets. However, uncertainties remain, and investors will closely monitor the U.S. inflation data for further guidance on market direction.
