China’s inflation data boosts Asian stocks, Hang Seng stretches gains

The Asian stocks made considerable gains on Friday in reaction to the China’s inflation and the upward movement in Wall Street a day earlier.

It was again Hang Seng Index which led charge as Hong Kong’s market was up by 2.32 points and closed at 19,900.87 with a gain of 450.64 points. Similarly, the Hang Seng Tech Index rose 2.45 percent, Mainland China’s Shenzhen Component by 0.55 percent and Shanghai Composite by 0.3 percent.

Japan’s Nikkei 225 closed up 1.18 percent at 27,901.01, S&P/ASX 200 in Australia 0.53 percent at 7,213.2 and Kospi in South Korea 0.76 percent at 2,389.04.

On Thursday too, Hong Kong’s Hang Seng was up by 3.50 percent (658.46 points) after media reports suggested that the city was considering further easing the Covid restrictions.

Similarly, the Hang Seng Tech index added around 6 percent — bucking the trend in the wider Asia-Pacific region, which were weighed down by continued recession fears.

According to the latest data that boosted the markets, China’s producer price index fell 1.3 percent in November compared to a year ago, extending its decline after shedding 1.3 percent in October, and slightly beating estimates for a 1.4 percent contraction.

The nation’s consumer price index rose 1.6 percent in November on an annualized basis, in line with expectations and easing from October’s reading of 2.1 percent.

Earlier on Thursday, the S&P 500 broke its longest losing streak since October by adding 0.75 points to finish at 3,963.51. The Dow Jones Industrial Average gained 183.56 points, or 0.55 percent, to settle at 33,781.48, while the Nasdaq Composite rallied 1.13 percent to end at 11,082.00.

Despite Thursday’s gains, stocks are on pace for a losing week, with the Dow down 1.88 percent. The S&P and Nasdaq are slated to finish 2.66 percent and 3.31 percent lower respectively.

Thursday’s jobless claims — specifically continuing claims — showed a modest uptick in claims. Continuing claims hit their highest level since February, a slight move in the right direction for the economy that could further fuel the narrative that the labor market needs to break in order for the Fed to successfully tamp down inflation.

Semiconductor and technology stocks that have struggled during this year’s selloff also gained during Thursday’s session, with Nvidia and Amazon adding 6.5% and 2.1%, respectively. Activision Blizzard fell as the FTC sued to block its acquisition by Microsoft. GameStop rose 11% after posting earnings late Wednesday.

Investor attention remains laser-focused on next week’s Federal Reserve policy meeting, where the central bank is widely expected to issue a 50-basis point interest rate hike. It’s a smaller increase than the prior four rate hikes, but may do little to alleviate recession fears as the Fed attempt to squash surging prices.

Next week’s November consumer price index should also provide more clarity on the direction of inflation along with the producer price index slated for Friday.

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