Asian Stocks Gain, Aussie Dollar Rises on CPI Beat: Markets Wrap

(Bloomberg) — Stocks in Asia rose, following a US tech rally and fresh economic data that rekindled hopes for US interest rate cuts.

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The MSCI Asia Pacific Index gained the most in a month, with benchmarks from Hong Kong to Japan and South Korea all in the green. The region’s chip-related stocks tracked the strength in their American peers. US and European futures also advanced.

The Australian dollar climbed 0.5% versus a broadly weaker greenback after a hot inflation print pointed to sticky local price pressures and reinforced the case for the central bank to hold rates at a 12-year high. The South Korean won led the gains in Asian currencies. Treasuries were largely steady.

In addition to the strong performance of the US tech giants, weakness in measures of business activity in the world’s largest economy also helped keep alive forecasts for Federal Reserve policy easing this year. Like on Wall Street, the focus is also on tech earnings in Asia as the region has entered its busiest week for corporate results.

“We’ve seen a nice bounce on Wall Street ahead of Big tech earnings, and that should filter through to Asian equity markets today,” said Matt Simpson, a senior market strategist at City Index Inc. “I’d stop short of calling it a risk-on rally at this stage, although there is some relief that the ECB and BOE seem happy to ‘decouple’ from the Fed.”

The S&P 500 notched its best back-to-back rally in two months. Nvidia Corp., the poster child of the artificial-intelligence boom, led a surge in chipmakers. Texas Instruments Inc. gave a bullish revenue forecast — a good sign for the chip industry that may help lift Asian producers on Wednesday.

Oil held a gain as an industry report showed shrinking US crude stockpiles and traders tracked progress toward fresh sanctions against Iran. Gold edged higher.

Elsewhere, the yen remained a whisker away from the key 155 level to the dollar, with a former top Japanese foreign exchange official warning the country is on the brink of currency intervention.

In the corporate world, Silchester International Investors disclosed it has taken a stake in Nikon Corp., pushing the shares up by the most in almost three years. Trading in SenseTime shares was halted after a 36% surge in Hong Kong, following the Chinese tech firm’s launch of its upgraded AI model.

Story continues

Earnings on Watch

In late US hours, Tesla Inc. soared as the electric-vehicle giant struck an upbeat tone despite a sales miss, the first of the “Magnificent Seven” megacaps to report. The stock halted a seven-day plunge, climbing alongside other members of the group.

Morgan Stanley’s Mike Wilson said the bar is high for US firms to deliver on earnings, particularly for megacap technology names, which face tough comparisons from the growth they showed last year.

Besides Tesla, Microsoft Corp., Meta Platforms Inc. and Alphabet Inc. are also due to report earnings this week. Profits for the “Magnificent Seven” group — which also includes Apple Inc., Amazon.com Inc. and Nvidia Corp. — are forecast to rise about 40% in the first quarter from a year ago, according to Bloomberg Intelligence data.

The group of tech megacaps is crucial to the S&P 500 since the companies carry the heaviest weightings in the benchmark. After this year’s advance, valuations have gotten lofty. After the latest selloff, the Magnificent Seven still traded at a combined 31 times forward earnings, according to data compiled by Bloomberg.

Key events this week:

Indonesia rate decision, Wednesday
IBM, Boeing, Meta Platforms earnings, Wednesday
Malaysia CPI, Thursday
South Korea GDP, Thursday
Turkey rate decision, Thursday
US GDP, wholesale inventories, initial jobless claims, Thursday
Microsoft, Alphabet, Airbus, Caterpillar earnings, Thursday
Japan rate decision, Tokyo CPI, inflation and GDP forecasts, Friday
US personal income and spending, University of Michigan consumer sentiment, Friday
Exxon Mobil, Chevron earnings, Friday

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.4% as of 1:20 pm Tokyo time
Japan’s Topix rose 1.5%
Australia’s S&P/ASX 200 was little changed
Hong Kong’s Hang Seng rose 1.7%
The Shanghai Composite rose 0.3%
Euro Stoxx 50 futures pink 0.4%
Nasdaq 100 futures rose 0.7%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0709
The Japanese yen was little changed at 154.85 per dollar
The offshore yuan was little changed at 7.2593 per dollar
The Australian dollar rose 0.5% to $0.6519

Cryptocurrencies

Bitcoin rose 0.5% to $66,683.2
Ether rose 1% to $3,242.36

Bonds

The yield on 10-year Treasuries advanced two basis points to 4.62%
Japan’s 10-year yield was unchanged at 0.890%
Australia’s 10-year yield advanced 13 basis points to 4.40%

Commodities

West Texas Intermediate crude rose 0.1% to $83.45 a barrel
Spot gold rose 0.2% to $2,327.19 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Rita Nazareth and Rob Verdonck.

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