By JOE McDONALD, AP Business Writer
BEIJING (AP) — Asian stocks rose on Wednesday after Wall Street rebounded as investors awaited U.S. inflation data that could influence the pace of Federal Reserve interest rate hikes.
Shanghai, Tokyo, Hong Kong and Sydney advanced.
Wall Street’s benchmark, the S&P 500, rose 0.8%, recovering from the previous day’s plunge.
Investors are awaiting U.S. inflation data on Thursday for signs of how quickly the Fed could withdraw historically low interest rates and other stimulus to try to cool soaring prices. Traders expect at least four rate hikes this year, starting next month.
Wall Street’s rebound “suggests an attempt by equity bulls to regain some control,” IG’s Yeap Jun Rong said in a report. “Much will depend on upcoming inflation data from the United States to allay some concerns about the tightening ahead.”
The Shanghai Composite Index advanced 0.1% to 3,457.44 and the Nikkei 225 in Tokyo gained 0.9% to 27,530.82. The Hang Seng in Hong Kong was up 1.6% at 24,735.75.
Seoul’s Kospi rose 0.6% to 2,764.21 and Sydney’s S&P-ASX 200 added 0.3% to 7,209.10.
The New Zealand and Southeast Asian markets grew.
On Wall Street, the S&P 500 rose to 4,521.54. The index is now about 5.7% below its January 3 peak.
The Dow Jones Industrial Average gained 1.1% to 35,462.78. The Nasdaq composite advanced 1.3% to 14,194.45.
Shares of small companies have outperformed the broader market, a potential sign that investors are optimistic about economic growth. The Russell 2000 Small Stock Index rose 1.6% to 2,045.37.
Markets have been volatile since Fed officials said in mid-December that stimulus withdrawal plans would be accelerated to cool inflation that is at its highest level in decades.
European central banks and others are also considering when to withdraw stimulus.
European Central Bank President Christine Lagarde said this week that any rate hikes would be gradual. Investors expect the ECB to take a more hawkish stance at its March meeting after the board said last week inflation risks were rising.
Higher interest rates can depress stock prices by dampening economic activity and making it more expensive to borrow money to finance transactions.
Economists expect Thursday’s data to show US inflation accelerating to a four-decade high of 7.3% in January.
On Tuesday, the yield on the 10-year US Treasury note, or the difference between its market price and the payment at maturity, rose to 1.96%, its highest level since the start of the pandemic, from 1 .91% on Monday.
Tech companies were a big part of the S&P 500 rally. Apple rose 1.8%.
Chipmaker Nvidia rose 1.5% after announcing it was ending plans to buy chip designer Arm from Softbank.
Retailers and other businesses that rely on direct consumer spending have helped boost the market. Amazon rose 2.2% and Home Depot gained 1.1%.
In energy markets, benchmark U.S. crude gained 11 cents to $89.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell from $1.96 the previous session to $89.36. Brent crude, the price base for international oils, rose 18 cents to $90.96 a barrel in London. It lost $1.91 on Tuesday to $90.78.
The dollar fell to 115.36 yen from 115.54 yen on Tuesday. The euro fell from $1.1413 to $1.1429.
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