Asian Shares Gain As Fed Keeps Options Open


Asian stocks advanced on Thursday after the U.S. Federal Reserve reiterated its fight against inflation and Chair Jerome Powell said staff economists at the central bank no longer foresee a recession.

Samsung Electronics forecast a gradual global chip demand recovery, helping lift technology stocks in the region.

Data showed the decline in China’s industrial profits narrowed for the straight month in June, offering some respite to investors concerned about slowing growth in the world’s second-largest economy.

Chinese shares ended slightly lower amid the lack of details on stimulus measures. The benchmark Shanghai Composite Index slipped 0.2 percent to 3,216.67, while Hong Kong’s Hang Seng Index rallied 1.4 percent to 19,639.11.

XPeng shares soared nearly 34 percent after German automaker Volkswagen announced a tie-up with the Chinese EV startup and joint venture partner SAIC to build new models and potentially co-create platforms.

Japanese shares rose notably as investors braced for the Bank of Japan’s policy meeting on Friday, with economists expecting the central bank to maintain its ultra-loose policy.

The Nikkei 225 Index gained 0.7 percent to close at 32,891.16 after the government kept its headline economic assessment unchanged in a monthly report released Wednesday. The broader Topix Index settled 0.5 percent higher at 2,295.14.

The yen strengthened sharply amid fears that the Bank of Japan could still offer a hawkish surprise by altering its yield curve control policy.

Chipmaking equipment giant Tokyo Electron advanced 2.7 percent and Screen Holdings rose 1.3 percent.

Electronics maker Sharp rallied 3.2 percent on a Nikkei report that top shareholder Foxconn has demanded the company submit an improvement plan within three months.

Seoul stocks eked out modest gains, with the Kospi rising 0.4 percent to 2,603.81. Samsung Electronics climbed 2.7 percent after it forecast an improvement in chip demand through the second half of the year. Peer SK Hynix surged 9.7 percent.

Australian markets climbed on optimism that cooling inflation would prompt the Reserve Bank to continue its pause in the rate-hike cycle.

The benchmark S&P/ASX 200 Index rose 0.7 percent to 7,455.90, hitting a five-month high, boosted by financials and technology stocks. The broader All Ordinaries Index closed up 0.7 percent at 7,672.60.

Investment bank Macquarie Group lost 4.4 percent after forecasting a lower quarterly profit.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index finished marginally lower at 11,954.11.

Overnight, U.S. stocks saw wild swings before ending narrowly mixed after the Federal Reserve announced a 25 basis point rate hike and left the door open for future hikes.

In his post-meeting press conference, Fed Chair Jerome Powell noted that a rate cut is unlikely this year and the central bank will make decisions meeting by meeting after watching incoming economic data.

The Dow edged up 0.2 percent to extend its winning streak to 13 sessions, while the S&P 500 and tech-heavy Nasdaq Composite finished marginally lower.

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