Asia’s major equity indices closed higher on Wednesday, tracking gains on Wall Street after investors scaled back bets on further interest rate increases by the US Federal Reserve, following the release of the latest inflation data from the world’s largest economy. Stocks linked to Artificial Intelligence (AI) drew fresh momentum, while oil posted another advance. In Europe, Euro Stoxx 50 futures edged up around 0.10%.
In Japan, the Nikkei gained 1.35% while the Topix rose 1.04%. In China, Hong Kong’s Hang Seng climbed 1.42%, although the Shanghai Composite slipped 0.36%. South Korea’s Kospi surged 6.42%, reclaiming its position as the world’s best-performing major stock index since the start of the year. In Taiwan, the TWSE added 2%.
In Seoul, shares in SK Hynix advanced nearly 10% and Samsung Electronics gained more than 6%, rebounding after a volatile start to the week for the technology sector. The stocks received a fresh boost after European chipmaker ASML raised its annual sales forecast for the second time this year. Elsewhere, South Korean firm Hanmi Semiconductor soared nearly 30% after announcing a 5% year-on-year increase in second-quarter operating profit.
US inflation data released on Tuesday, combined with a solid start to the earnings season, reinforced optimism surrounding the Artificial Intelligence sector. Although the figures give the Federal Reserve greater room to hold interest rates steady, escalating tensions in the Middle East continue to cloud the inflation outlook amid renewed energy price rises. “A lower-than-expected Consumer Price Index is a major relief,” Tiffany Wilding of Pacific Investment Management Co told Bloomberg. Nevertheless, the analyst noted that while the report “does not entirely eliminate the discussion around further monetary tightening, it should in practice take a July rate hike off the table.”
In China, retail sales rose an unexpected 1% in June, reversing a 0.6% decline recorded in May. Industrial output also beat forecasts, expanding 5.3%. Even so, gross domestic product (GDP) growth slowed to 4.3%, falling short of Beijing’s official target range of 4.5% to 5% for the year.
Despite the day’s gains, a cautious mood persisted among investors as oil prices rose for a third consecutive session, after US President Donald Trump threatened to launch new strikes against Iranian infrastructure. The United States also resumed its blockade of ports and vessels belonging to the Islamic Republic through the Strait of Hormuz.
Source: Diário Económico
