Asian stocks follow Wall St up ahead of US inflation update

Asian stocks followed Wall Street higher on Friday ahead of a United States inflation update traders hope might prompt the Federal Reserve to ease plans for more interest rate hikes.

Shanghai, Tokyo, Hong Kong and Sydney advanced. Oil prices declined.

Wall Street rose on Thursday as worries about the global financial system eased following the collapse of two US banks and one in Switzerland.

Traders hope a measure of US inflation due out Friday that is closely watched by the Federal Reserve will show upward pressure on prices easing. That might prompt the Fed to postpone plans for a possible rate hike at its May meeting.

A softer inflation reading would be a “signal to continue with the risk-on theme,'' said Tim Waterer of Kohle Capital Markets in a report.

The Shanghai Composite Index rose 0.3 per cent to 3,269.83 and the Hang Seng in Hong Kong gained 1.1 per cent to 20,532.33.

The Nikkei 225 in Tokyo advanced 1 per cent to 28,046.75 after government data showed factory output rebounded and retail sales rose in February.

The Kospi in Seoul added 0.9 per cent to 2,475.69 and Sydney's S&P-ASX 200 was 0.8 per cent higher at 7,176.00.

New Zealand declined while Indonesia, Singapore and Malaysia advanced.

Traders were rattled by this month's bank failures but regulators appear to have calmed fears by promising lending measures if needed to keep other institutions stable after repeated rate hikes caused prices of bonds and other assets on their books to fall.

Markets have shifted focus back to uncertainty about the global economic outlook as the Fed and other central banks try to extinguish inflation. Traders have begun betting the Fed will be forced to cut rates as early as mid-year to shore up economic growth. That is despite statements by Fed officials that they plan to raise rates one more time before holding them steady into at least early 2024.

The Fed's key lending rate stands at a range of 4.75 per cent to 5 per cent, up from close to zero at the start of last year.

On Wall Street, the benchmark S&P 500 index rose 0.6 per cent on Thursday to 4,050.83 for its fifth gain in six days.

The Dow Jones Industrial Average rose 0.4 per cent to 32,859.03. The Nasdaq composite gained 0.7 per cent, to 12,013.47.

Expectations for easier rates in turn have helped to buoy the Big Tech stocks that dominate the S&P 500 and other indexes. Amazon rose 1.7 per cent on Thursday, while Apple and Microsoft also rose.

A report Thursday showed slightly more US workers applied for unemployment benefits last week than expected. That could be a sign of increased layoffs, but the number is low compared with historical levels.

In a separate report, the government revised down its estimate for how much the US economy grew during the last three months of 2022. But it also still showed growth.

In energy markets, benchmark US crude shed 6 cents to USD 74.31 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose USD 1.40 on Thursday to USD 74.37. Brent crude, the price basis for international oil trading, lost 16 cents to USD 78.44 per barrel in London. It advanced 99 cents the previous session to USD 79.27.

The dollar gained to 132.93 yen from Thursday's 132.47 yen. The euro was little-changed at USD 1.0903.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)