Asia report: Most markets rise on back of US inflation reading

Markets across the Asia-Pacific region experienced a largely positive day on Thursday after US inflation rates for August exceeded predictions.

The inflation rate came in at 3.7%, slightly above the 3.6% anticipated in a recent Dow Jones survey.

“The still relatively moderate core inflation reading for August - the third month in a row - combined with the cooling labour market seen in the August Employment Report likely seals the deal for a rate-hike pause at the September FOMC meeting,” said SPI Asset Management managing partner Stephen Innes.

“Nevertheless, given the disconcerting uptick in headline inflation and the ongoing ascent of oil prices, the Federal Reserve is likely to maintain the option of another rate hike should the trend of inflation moderation witnessed over the summer fail to persist.

“Even if a hike does not materialise, a move to lower the current target range of 5.25% to 5.50% is unlikely to begin until about June 2024, given the expected sluggish path of inflation back to the target.”

Most major regional markets finish in the green

Japan witnessed a buoyant day, with the Nikkei 225 seeing a jump of 1.52% to settle at 33,212.50 points, while the Topix index experienced a rise of 1.13%, finishing at 2,405.57.

Among the top gainers on Tokyo’s benchmark, JGC Corporation soared by 6.05%, Idemitsu Kosan Co surged by 4.76%, and Mitsui Engineering & Shipbuilding capped a 4.5% rise.

In China, the Shanghai Composite increased by a modest 0.11%, ending at 3,126.55, while the Shenzhen Component moved in the opposite direction, slipping 0.57% to conclude at 10,197.59.

Grace Fabric Technology Co and Heilongjiang Transport Development Co were star performers in Shanghai, both cresting the 10% mark in gains.

Hong Kong's Hang Seng Index inched up 0.24%, landing at 18,053.00.

Significant movers in the special administrative region included PetroChina, with an impressive 5.83% increase, followed by CNOOC at 5.02%, and Orient Overseas International, which rose by 4.64%.

South Korea mirrored Japan's upbeat sentiment, with the Kospi advancing 1.51% to 2,572.89.

Hanjinkal stole the spotlight, skyrocketing by 26.96%, while SK Biopharmaceuticals also had a commendable performance, gaining 6.9%.

Australia saw moderate growth, with the S&P/ASX 200 rising 0.46% to finish at 7,186.50.

Amongst the front-runners, Champion Iron and Coronado Global Resources increased by 4.33% and 4.18%, respectively.

Conversely, New Zealand's market faced headwinds, with the S&P/NZX 50 falling 0.38% to 11,313.53.

EROAD and Fletcher Building recorded declines, dropping 6.67% and 5.11% respectively.

On the currency front, the dollar was weaker against the yen and its Aussie counterpart by 0.05% and 0.1% to JPY 147.38 and AUD 1.5558, respectively.

The greenback did, however, gain slightly on the New Zealand dollar, by 0.03%, to change hands at NZD 1.6902.

Both Brent crude and West Texas Intermediate futures registered gains in the oil sector, increasing 0.64% to $92.47 and 0.62% to $89.07 per barrel, respectively.

Australia's unemployment figures align with expectations in August

In economic news, Australia's unemployment rate remained at 3.7% for August, consistent with the prior month.

The figure also matched predictions made by a group of economists polled by Reuters.

Employment figures also experienced growth, with an uptick of 64,900 in the number of employed individuals in August compared to the prior month.

Notably, the labour participation rate for the country also reached 67%, surpassing the expected rate of 66.7% as per the Reuters poll.

Reporting by Josh White for Sharecast.com.