Asian Shares Extend Gains On Dovish Fed Commentary

Asian stocks advanced for a sixth day running on Thursday, with sentiment helped by dovish Fed commentary and a move by China’s sovereign wealth fund to buy shares of the country’s largest banks.

The dollar held near a two-week low amid falling Treasury yields and on the back of less hawkish comments by some U.S. policymakers, including Boston Fed President Susan Collins and her Atlanta counterpart Raphael Bostic.

Gold edged higher to hover near two-week highs, while oil prices fell for a third day on Saudi’s pledge to stabilize the market and industry data showing a substantial increase in crude stockpiles.

The focus remained firmly on U.S. consumer price inflation data due out later in the day that may show a further easing in price pressures.

Chinese markets rose, with the benchmark Shanghai Composite Index climbing 0.9 percent to 3,107.90 after Central Huijin Investment, which is a subsidiary of China’s sovereign wealth fund, purchased between 18 million and 37 million shares in four banks and said it “intends to continue to increase” its holdings in the next six months. Hong Kong’s Hang Seng Index surged 1.9 percent to 18,238.21.

Japanese shares rallied, led by chip-related companies. The Nikkei 225 Index jumped 1.8 percent to 32,494.66, extending gains for a third day running and marking its highest close since September 25.

The broader Topix Index settled 1.5 percent higher at 2,342.49. Tokyo Electron, Screen Holdings and Advantest jumped 3-4 percent after earnings results from Samsung Electronics showed early signs of recovery from a severe downturn. Renesas Electronics soared 5.2 percent.

Refiner Idemitsu Kosan surged 5.6 percent after it formed an alliance with Toyota Motor to develop and mass-produce all-solid-state batteries for electric vehicles.

Japan core machinery orders fell for a second straight month in August, while the pace of growth in producer prices decelerated more than expected in September, separate reports showed earlier today.

Seoul stocks ended sharply higher, buoyed by gains the tech and aviation sectors. The Kospi gained 1.2 percent to finish at 2,479.82. Chipmaker SK Hynix topped the gainers list to close 4.2 percent higher at 124,200 won.

Australian markets finished marginally higher as healthcare stocks dropped, offsetting gains among financials and gold miners.

Biopharmaceutical firm CSL tumbled 6.3 percent, tracking slumps of global dialysis services providers after Novo Nordisk’s Ozempic drug showed early signs of success in delaying the progression of kidney disease in diabetes patients.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index slipped 0.1 percent to 11,292.58 after Air New Zealand warned of lower earnings for the first half of fiscal 2024.

U.S. stocks extended gains for the fourth consecutive session on Wednesday as oil prices fell again and the Fed’s September meeting minutes echoed the recent message of data dependence, with around two-thirds of Fed members predicting one more rate hike before the end of 2023.

Traders largely shrugged off data showing that a measure of wholesale prices rose more than expected in September, partly due to a continued surge in energy prices.

The tech-heavy Nasdaq Composite advanced 0.7 percent, while the S&P 500 added 0.4 percent and the Dow rose 0.2 percent.

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