Asian stock markets mostly traded higher on Thursday as traders responded to higher-than-expected US inflation data, which fueled speculation that the Federal Reserve may keep interest rates elevated for an extended period.
Japan’s Nikkei rises sharply
The Japanese market extended its rally for a fourth consecutive session, with the Nikkei 225 climbing 511.10 points or 1.31% to 39,474.80 by the morning session, after hitting an intraday high of 39,486.66.
Gains were broad-based, led by index heavyweights and financial stocks.
Market heavyweight SoftBank Group slid nearly 4%, while Fast Retailing advanced over 2%. Automakers Toyota and Honda both gained more than 2%.
On Thursday, the Bank of Japan said that producer prices rose 0.3% in January, meeting expectations.
Hong Kong stocks surge on DeepSeek optimism
Hong Kong’s Hang Seng Index climbed 1.5% to 22,178.27 by late morning, reaching its highest level since October 7, fueled by strong performance in Chinese technology stocks.
The Hang Seng Tech Index rose 1.4%, briefly surging 2.3% earlier in the session on optimism surrounding China’s rescue measures for stock and property markets.
Alibaba Group Holding extended its rally, gaining over 3%. Sunny Optical Technology soared after reporting net income more than doubled in 2024.
SMIC advanced as Goldman Sachs upgraded its rating to “buy.”
China’s CSI 300 Index edged up 0.2%, while the Shanghai Composite added 0.1%.
Other regional markets
The Australian market inched higher, continuing its upward trend for the third session.
The S&P/ASX 200 rose 14.80 points or 0.17% to 8,550.10, with a high of 8,575.20 earlier in the session.
South Korean stocks were trading higher on Thursday, led by tech and auto gains.
At the time of writing, the Kospi was up 1.03% to trade at 2,576.28.
Wall Street volatile on Wednesday
US stocks experienced a volatile trading session on Wednesday, as early losses gave way to a partial recovery.
While the tech-heavy Nasdaq managed to edge into positive territory, the Dow and the S&P 500 closed lower.
The Nasdaq rose slightly by 6.09 points, or less than 0.1%, to finish at 19,649.95 after being down as much as 1.2% earlier in the session.
Meanwhile, the Dow dropped 225.09 points, or 0.5%, to 44,368.56, and the S&P 500 declined 16.53 points, or 0.3%, to 6,051.97.
The initial sell-off followed the release of the US Labor Department’s consumer price index (CPI) report, which showed inflation in January exceeded expectations.
Consumer prices rose 0.5% for the month, compared to a 0.3% forecast by economists, and accelerated on an annual basis to 3.0% from 2.9% in December.
The higher-than-expected inflation data was driven in part by a continued surge in energy prices, which increased 1.1% in January after a 2.4% spike in December.
This added to concerns over the potential for prolonged inflationary pressures, impacting investor sentiment.
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