Stocks Are Rising In Asia
Asian shares rose. The dollar fell after Federal Reserve Chairman Jerome Powell said a “disinflationary” process was underway, significantly increasing risk appetite as investors expected U.S. interest rate hikes to end.
MSCI’s broadest index of Asia-Pacific stocks outside Japan was 0.92% higher on Thursday. After falling nearly 22% last year, the index is up nearly 11.5% for the year and recently had its best January performance since 2012.
Futures indicated that European shares were likely to continue their rally, with Eurostoxx 50 futures up 0.75%. German DAX futures up 0.75%, and FTSE futures up 0.47%.
The U.S. Federal Reserve issued an expected interest rate hike of 25 bps after a year of larger hikes, saying it had turned a main corner in the fight against inflation. But analysts think that “ongoing increases” in borrowing costs would still be necessary.
Foreign investors bought Japanese shares last week as domestic shares rose, tracking gains in U.S. stocks on expectations that the Federal Reserve will slow rate hikes to stave off a recession.
Foreign investors bought a net 1.33T yen worth of Japanese stocks, marking their biggest weekly net buying since September 2018, stock exchange data showed.
They received 1.03T worth of derivatives and 303.82B worth of cash.
The Nikkei stock average and the Topix index gained about 3.3% last week, the most since November 11.
All eyes on BOE, ECB & Earnings
The focus will now shift to the EU Central Bank and BOE meetings scheduled for Thursday. The interest rate path the two central banks are expected to take.
Strategists at Saxo Markets said the ECB is likely to do well this week compared to other central banks.. They said the BOE would be the most difficult to predict market prices and the possibility of vote-splitting.
IThis year, Meta Platforms Inc unveiled price controls and a new $41B share buyback. CEO Mark Zuckerberg called it a “performance year.”
Meta shares rose in after-market trading, and Nasdaq futures rose 1.7%. S&P 500 E-mini futures rose 0.35%. On Thursday, all eyes will be on Apple and Amazon’s earnings.
The greenback edged lower in the foreign exchange market, with the U.S. dollar index falling to 100.80 on Wednesday, its latest nine-month low. The last one was at 100.88 on Thursday.
The euro increased by 0.28% and amounted to 1.1018 US dollars. Meantime, the yen strengthened 0.42% to $128.44, while the sterling last traded at $1.2389, up 0.12% during the day.
