Asian shares rise as investors await U.S. inflation data

by Jonathan Adams
Nikkei

Nikkei 225 gained 2.2% to 37,723.62, S&P/ASX 200 rose nearly 0.1% to 7,619.20, Kospi climbed 1.2% to 2,651.33, while trading was closed in China, Hong Kong and Taiwan for the Lunar New Year holiday

Asian shares mostly rose on Tuesday, as investors watched for the latest indicators on U.S. inflation.

Japan’s benchmark Nikkei 225 gained 2.2% in morning trading to 37,723.62. Australia’s S&P/ASX 200 rose nearly 0.1% to 7,619.20. South Korea’s Kospi climbed 1.2% to 2,651.33. Trading was closed in China, Hong Kong and Taiwan for the Lunar New Year holiday.

Japan’s producer price index (PPI) data showed a 0.2% rise from a year ago, while remaining flat on-month.

The tame number may still indicate limited passthrough to consumer prices and may offer room for the BoJ to keep to its wait-and-see for now. Market expectations have been pricing for rate hike to come only in April 2024, said Yeap Jun Rong, market analyst at IG.

Wall Street held relatively steady following its latest record-setting week. The S&P 500 slid 4.77 points, or 0.1%, to 5,021.84 Monday, after closing Friday above the 5,000 level for the first time.

Most of the stocks in the index gained, but losses for Microsoft and other tech companies weighed on the index.

The weakness for tech also pulled the Nasdaq composite lower by 48.12, or 0.3%, to 15,942.55. Earlier in the day, It had been hovering just above its all-time closing peak set in 2021. The Dow Jones Industrial Average (DJIA), meanwhile, added 125.69, or 0.3%, to 38.797.38 to set its latest record.

Conditions were calm across markets, and yields were also steady in the bond market. The next big event for the market could be Tuesday’s update on inflation across the US, which economists expect to show a decline back below the 3% level.

Concerns have grown about how top-heavy the stock market has become, where the biggest companies known as the “Magnificent Seven” have accounted for a disproportionate amount of the S&P 500’s rally to a record. If more firms apart from the group can deliver strong profit growth, it could soften the criticism that the market has become too expensive.

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