Asia report: Stocks rally after solid session on Wall Street

Markets in Asia rallied through to the close on Friday, following the lead of a stellar session on Wall Street overnight, even after the latest consumer inflation reading in the US came in hotter than expected.

In Japan, the Nikkei 225 was up 3.25% at 27,090.76, as the yen weakened 0.35% against the dollar to last trade at JPY 147.63.

Automation specialist Fanuc was up 0.92%, fashion firm Fast Retailing surged 8.4%, and technology conglomerate SoftBank Group gained 3.31%.

The broader Topix index was 2.35% firmer by the end of trading in Tokyo, settling at 1,898.19.

On the mainland, the Shanghai Composite was ahead 1.84% at 3,071.99, and the technology-centric Shenzhen Component was up 2.81% at 11,121.72.

Fresh inflation data released by Beijing showed consumer prices in China rising 2.8% year-on-year in September - the fastest rate since April 2020.

The growth was driven by soaring food prices, which ballooned by 8.8% on the year.

“We expect non-food inflation to fall next month, and the authorities’ ability to control pork inflation will be key in determining whether September marks the peak for headline inflation,” said Craig Botham at Pantheon Macroeconomics.

“For now, wholesale pork prices continue to climb, but we will need a much larger increase to sustain the September inflation rate.

“We expect inflation to pull back in October.”

Producer prices, meanwhile, rose 0.9% over the same period last year - just below the 1% pencilled in by analysts in a Reuters poll.

“We expect PPI inflation to trend lower as we head into year-end, and think outright deflation is likely by the first quarter of 2023,” Pantheon’s Craig Botham added.

“Where PPI leads, Chinese export prices tend to follow, as we have noted before, so China will be helping the fight against inflation elsewhere.”

South Korea’s Kospi jumped 2.3% to 2,212.55, while the Hang Seng Index in Hong Kong added 1.21% to 16,587.69.

The blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 1.99%, and SK Hynix rising 0.63%.

Sentiment in Asia was boosted by a solid session stateside overnight, where the Dow Jones Industrial Average rose more than 800 points in a serious turnaround from its opening losses.

Those moves came after the latest CPI reading from the US Labor Department showed consumer prices rising at an expectations-busting 8.2% year-on-year in September.

Oil prices were lower as the region entered the weekend, with Brent crude last down 0.78% at $93.83 per barrel on ICE, and the NYMEX quote for West Texas Intermediate 0.89% lower at $88.32.

In Australia, the S&P/ASX 200 gained 1.775% to 6,758.80, while across the Tasman Sea, New Zealand’s S&P/NZX 50 managed a rise of 0.47% to 10,868.09.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.2% at AUD 1.5846, and the Kiwi advancing 0.15% to NZD 1.7712.

Reporting by Josh White at Sharecast.com.