Asian stocks follow Wall St higher as US inflation cools

BEIJING (AP) – Asian stock markets followed Wall Street higher on Friday after U.S. inflation eased in March and China reported unexpectedly strong exports.

Shanghai, Tokyo and Hong Kong gained. Oil prices rose.

Wall Street’s benchmark S&P 500 index rose 1.3% on Thursday after inflation at the wholesale level slowed more than expected.

Asian markets were “taking cues from a solid rally on Wall Street,” said Anderson Alves of ActivTrades in a report.

The Shanghai Composite Index advanced 0.2% to 3,323.20 after customs data Thursday showed China’s March exports rose 14.8% over a year earlier, rebounding from a decline in January and February.

The Nikkei 225 in Tokyo gained 1% to 28,433.11. The Hang Seng in Hong Kong added less than 0.1% to 20,361.16.

The Kospi in Seoul, South Korea, advanced 0.5% to 2,573.78 and Sydney’s S&P-ASX 200 was 0.3% higher at 7,348.20.

New Zealand declined while Singapore and Jakarta, Indonesia, gained.

Traders hope signs stubbornly high inflation is weakening might prompt the Federal Reserve and other central banks to postpone or scale back plans for interest rate hikes to cool business and consumer activity.

Government data Thursday showed prices paid to U.S. producers rose 2.7% over a year earlier, the smallest gain in more than two years.

On Wednesday, separate data showed consumer inflation slowed to 5% from February’s 6%.

Another report Thursday said slightly more workers applied for unemployment benefits last week than expected, though the job market has remained resilient.

The S&P 500 gained to 4,146.22. The Dow rose 1.1% to 34,029.69, and the Nasdaq jumped 2% to 12,166.27.

Notes from the Fed’s March 21-22 meeting showed members agreed its next rate hike would be one-quarter percentage point instead of a half-point.

Some traders are betting the Fed might keep its benchmark lending rate steady at its May meeting.

Others expect the U.S. central bank to start cutting rates as early as mid-year to shore up the economy. Fed officials have said they expect at least one more increase this year and then for the benchmark rate to stay elevated through at least early 2024.

Big U.S. companies are starting to tell investors how much they earned during the first three months of the year.

Expectations are low. Forecasts call for the sharpest drop in earnings since the pandemic was pummeling the economy in 2020.

The biggest banks are due to start reporting results following a flurry of anxiety about the industry after two high-profile failures in the United States and one in Switzerland.

That stirred fears banks were cracking under the strain of rate hikes. Regulators appear to have soothed that unease by promising more lending to institutions and other steps if needed.

Notes from the Fed meeting said its staff economists see such weakness potentially causing a mild recession later this year.

In energy markets, benchmark U.S. crude rose 26 cents to $82.42 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.10 on Thursday to $82.16. Brent crude, the price basis for international oil trading, gained 19 cents to $86.28 per barrel in London. It lost $1.24 the previous session to $86.09.

The dollar fell to 132.43 yen from Thursday’s 132.77 yen. The euro gained to $1.1070 from $1.1046.

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