HONG KONG, May 27 — Asian markets rose today, tracking a bounce on Wall Street at the end of a painful week for investors, with eyes now on the upcoming release of key US inflation data.
Sentiment took a blow last week after Federal Reserve officials warned they wanted more evidence that prices were being brought under control, fuelling worries they might not cut interest rates this year.
That was compounded by figures suggesting the world’s number one economy remained in rude health, despite borrowing costs being kept at two-decade highs.
But the S&P 500 and Nasdaq both benefited Friday from figures showing one-year expectations for prices edged down slightly, while consumer sentiment picked up.
The positivity followed through to Asia, which was also boosted by news that profits at China’s industrial companies rose in April, having dropped the month before.
Hong Kong, Tokyo, Shanghai, Sydney, Seoul, Mumbai, Singapore, Bangkok and Taipei all rose, though there were some losses in Jakarta, Manila and Wellington.
Paris and Frankfurt advanced in the morning. London was closed for a holiday.
“Markets continue to consolidate while global investors remain discerning on signs of US economic health and Fed’s plausible monetary path,” said Edward Ng, of Nikko Asset Management.
Focus is now turning to the release of the US personal consumption expenditures (PCE) index, which is the Fed’s preferred gauge of inflation.
“Investors will look to US PCE print this Friday as a potential signpost for further market directions,” Ng added.
The reading comes after the consumer price index edged down in April, having come in above forecasts for each of the previous three months.
Also coming up is the Fed’s Beige Book on the state of the economy, which will be pored over for an idea about the bank’s thinking on monetary policy.
Oil prices extended last week’s gains of more than one per cent ahead of a key June 2 meeting of Opec and other major producers, with expectations high that they will maintain output cuts.
“Based on current market expectations that Opec+ is likely to extend cuts, oil’s risks are skewed to the upside,” said Qisheng Futures analyst Gao Jian.
In company news, the stock price of the electric vehicle arm of China’s struggling property giant Evergrande more than doubled after it emerged liquidators were in talks with potential buyers.
Evergrande New Energy Vehicle piled on 113 per cent in Hong Kong, representing the biggest intra-day jump in nearly 10 years, according to Bloomberg News. — AFP
