Asian stocks ended broadly higher on Thursday as optimism over a less hawkish Fed outweighed concerns that a surge in COVID cases in China would weigh on growth.
After the release of dovish Federal Reserve November meeting minutes, market participants are now convinced that the U.S. Federal Reserve will temper its pace of interest rate hikes in its upcoming meetings.
China’s Shanghai Composite index dropped 0.25 percent to 3,089.31 after the country logged record-high COVID-19 infections, despite stringent measures designed to eliminate the virus.
The downside remained capped after authorities signaled more monetary stimulus was on the cards.
Hong Kong’s Hang Seng index rose 0.78 percent to 17,660.90, with property stocks rallying after four of China’s biggest banks agreed to provide fundraising support to property developers.
Japanese stocks rallied to end at over two-month highs, as relatively dovish signals from the Federal Reserve helped traders look past data showing that factory activity in the country shrank at the quickest pace in two years in November.
The Nikkei average climbed 0.95 percent to 28,383.09, marking the highest level since Sept. 13. The broader Topix index jumped 1.21 percent to 2,018.80.
Chip-related heavyweights topped the gainers list, with Advantest, Tokyo Electron and Screen Holdings surging 4-5 percent.
Internet firm Cyber Agent soared almost 7 percent as Japan stunned Germany 2-1 at the Khalifa Stadium in their World Cup Group E opener.
Seoul stocks rose sharply as the Bank of Kora opted for a relatively smaller 25 bps hike, in line with expectations. The Kospi average climbed 0.96 percent to 2,441.33, extending gains for a second day running. LG Chem jumped 3.9 percent while Hyundai Motor SK Hynix added 1-2 percent.
Australian shares ended slightly higher, with mining and gold stocks outperforming.
The benchmark S&P/ASX 200 edged up 0.14 percent to 7,241.80 while the broader All Ordinaries index ended 0.13 percent higher at 7,432.20.
Kogan shares soared 7.9 percent after the retailer said it is on course to historical operating margins during the second half of FY23.
Across the Tasman, New Zealand’s benchmark S&P/NZX 50 index finished marginally lower at 11,321.71, a day after the country’s central bank raised its key interest rate to the highest level since 2009.
U.S. stocks rose overnight as the minutes of the Fed’s early-November policy meeting showed a “substantial majority” of Fed officials supported slowing down the pace of interest rate hikes at upcoming meetings.
A few argued that it could be advantageous to wait to slow the pace of rises until the policy rate was “more clearly in restrictive territory” and that there were clearer signals inflationary pressures were receding significantly.
Economic data proved to be a mixed bag, with jobless claims increasing more than expected last week, while business activity contracted for a fifth month in November.
The Dow rose 0.3 percent to reach a seven-month closing high while the S&P 500 gained 0.6 percent and the tech-heavy Nasdaq Composite surged 1 percent.
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