Singapore — Asia-Pacific markets traded higher on Thursday, following gains on Wall Street. The S&P 500 and Dow Jones Industrial Average reached new records as investors shrugged off geopolitical concerns, according to a report on CNBC.
Australia’s S&P/ASX 200 ended the day up 0.43 percent to reach 8,223 points. South Korea’s Kospi jumped 0.3 percent in trade, while the small-cap Kosdaq was down 0.4 percent.
Japan’s Nikkei 225 was trading up 0.2 percent, while the broad-based Topix also gained 0.2 percent.
Traders in Asia were assessing September data on producer prices in Japan which rose 2.8 percent from a year ago. Economists polled by Reuters had predicted the inflation rate would come in at 2.3 percent, down from 2.5 percent in August.
Japanese retailer Seven & i Holdings Co. will report its quarterly earnings on Thursday, with much of the focus on what it will say about restructuring and outlook after it received a revised buyout offer from Alimentation Couche-Tard Inc. Seven & i shares were up just 0.6 percent on Thursday.
The mainland CSI 300 was up nearly three percent, while Hong Kong’s Hang Seng index was up over four percent.
China’s central bank said it began accepting applications from financial institutions to join a newly created liquidity tool — initially worth 500 billion yuan ($70.7 billion) — that will provide easier access to capital for the stock market.
The rebound in Chinese stocks comes after a market rally stalled on Wednesday. The CSI 300 broke a 10-day winning streak to drop seven percent. The rally had been triggered by a blitz of government stimulus measures at the end of September.
China’s Finance Ministry will hold a press briefing on Oct. 12, during which they may provide additional insights into fiscal policy and economic development.
Speaking to “Street Signs Asia” on Thursday, Chetan Ahya, Chief Asia Economist at Morgan Stanley, said that Beijing would need to announce a 10 trillion yuan ($1.4 trillion) fiscal stimulus focused on boosting consumption to create a sustained turnaround in investor confidence.
“That’s not what we are saying they’ll do, but we think that they’ll need something like that to get the economy out of deflation,” Ahya said.
Overnight in the U.S., the S&P 500 rallied 0.71 percent to end at 5,792.04 after hitting an all-time high, while the 30-stock Dow surged 431.63 points, or 1.03 percent, to reach 42,512 for a record close. The Nasdaq Composite gained 0.6 percent to end at 18,291.62.
Wall Street maintained its gains after the release of minutes from the Federal Reserve’s September meeting, in which it cut by a half percentage point, revealed that a “substantial majority of participants” had favored reducing interest rates by the larger amount.
The strong trading day also came despite lingering fears of a broader war in the Middle East as Israel promises to launch a retaliatory strike against Iran.
The U.S. Bureau of Labor Statistics will publish its September data on consumer prices on Thursday morning in the U.S. Economists polled by Reuters expect core inflation to hold steady at 3.2 percent year-on-year.
Economic indicators have shown that the labor market is perhaps stronger than officials favoring the 50 basis point move had expected.
In September, nonfarm payrolls increased by 254,000, much more than expected, while the unemployment rate dipped to 4.1 percent.
The data has helped cement expectations that while the Fed likely is in the early days of an easing cycle, future cuts likely would not be as aggressive as the September move.