Asian stocks gain ahead of US inflation report
Asian stocks followed Wall Street higher on Tuesday ahead of data traders hope will show surging US inflation eased in August, reducing pressure for more interest rate hikes.
Shanghai, Tokyo, Hong Kong and Sydney advanced. Oil prices edged lower.
Wall Streets benchmark S&P 500 index gained 1.1 per cent on Monday for its fourth daily rise.
Investors were waiting for US government data they hope would say inflation peaked at a four-decade high of 9.1 per cent in June and has fallen further after declining to 8.5 per cent in July.
Such a decline might help the Federal Reserve avoid having to raise interest rates further to a level that might tip the US economy into recession. The report will likely show pricing pressure relief but will not change the Fed from maintaining an aggressive stance, Edward Moya of Oanda said in a report.
The Shanghai Composite Index gained 0.4 per cent to 23,274.57 and the Nikkei 225 in Tokyo added 0.2 per cent to 28,589.11. The Hang Seng in Hong Kong rose 0.7 per cent to 19,489.43.
The Kospi in Seoul soared 2.6 per cent to 2,445.99 and Sydneys S&P-ASX 200 rose 0.6 per cent to 7,002.00.
New Zealand declined while Southeast Asian markets gained.
On Wall Street, the S&P 500 rose to 4,110.41. The Dow Jones Industrial Average gained 0.7 per cent to 32,381.34. The Nasdaq composite rallied 1.3 per cent to 12,266.41.
On Wednesday, the US government is due to report August inflation at the wholesale level.
Fed officials have affirmed support for substantial rate hikes and to keep borrowing costs elevated for long enough to make sure inflation is extinguished.
Investors hope receding inflation pressures might prompt the Fed to back off. Similar hopes earlier were dashed when chair Jerome Powell said in August that rates would stay high.
Surveys show traders expect the Fed this month to raise rates for the fifth time this year and by 0.75 percentage points, three times its usual margin. Then, traders expect the US central bank to hold rates steady through the first half of 2023.
In energy markets, benchmark US crude lost 7 cents to USD 87.71 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 99 cents to USD 87.78 on Monday. Brent crude, the price basis for international oil trading, shed 12 cents to USD 93.88 per barrel in London. It gained USD 1.16 the previous session to USD 94.
The dollar eased to 142.45 yen from Mondays 142.73 yen. The euro rose to USD 1.0130 from USD 1.0117.
(Except for the headline, this story has not been edited by The Federal staff and is auto-published from a syndicated feed.)