Stocks jump in Hong Kong, Shanghai and Seoul
Stocks climbed in Asia on Thursday after a key measure of inflation in the U.S. came in lower than expected, easing worries that price pressures could push interest rates higher.
Tokyo’s Nikkei 225 index NIK, +0.60% gained 0.4% and the Hang Seng HSI, +1.65% in Hong Kong added 1.6%. South Korea’s Kospi 180721, +1.88% surged 2.1%, buoyed by a 1.7% rise in shares in Samsung Electronics 005930, +1.36%. In Australia, the S&P/ASX 200 XJO, -0.00% was about flat.
The Shanghai Composite index SHCOMP, +2.36% jumped 1.8% as Chinese leaders prepared to wrap up the annual session of the largely ceremonial legislature.
Stocks also advanced in Singapore STI, +0.85% and Indonesia JAKIDX, +1.05%.
On Wall Street, energy and financial stocks rose while Big Tech shares declined. The S&P 500 added 0.6% and the Dow Jones Industrial Average hit a record high, though tech stocks pulled the Nasdaq slightly lower.
The Labor Department reported that U.S. consumer prices, a key measure of inflation at the consumer level, rose 0.4% in February, the biggest gain in six months, led by a jump in gasoline prices. But core inflation, excluding food and energy, posted a much smaller 0.1% gain, easing fears that the inflation might surge as the economy recovers from the pandemic.
The timing could not have been better, Stephen Innes of Axi said in a commentary.
“As Biden’s . . . $1.9 trillion fiscal stimulus plan was passed by the House, CPI data revealing softer sequential core pressures were there to greet and subdue fears of runaway inflation,” Innes said. “Upshot being, U.S. inflation data appears to have bought some space for, and lent credence to, prolonged and unwavering stimulus.”
Treasury yields fell broadly following the report, including the benchmark 10-year Treasury note, which influences interest rates on mortgages and other consumer loans. The yield on the 10-year Treasury note was steady at 1.53% on Thursday after rising as high as 1.60% late last week.
Bond yields have risen in the past month. The fall in bond prices, which are inversely related to yields, attracted investors reluctant to pay high prices for stocks, especially tech stocks that looked most expensive.
In New York, the S&P 500 SPX, +0.60% rose 23.37 points to 3,898.81. The Dow DJIA, +1.46% gained 1.5% to a record 32,297.02, thanks partly to a 6.4% jump in Boeing BA, +6.39%. The Dow’s previous all-time high was about two weeks ago.
The Nasdaq COMP, -0.04% slipped less than 0.1% to 13,068.83, taking it about 7.3% below the all-time high it reached on Feb. 12.
Investors are also betting the latest $1.9 trillion in government stimulus will help lift the U.S. economy out of its coronavirus-induced malaise. The House approved the sweeping pandemic relief package over Republican opposition on Wednesday, sending it to President Joe Biden to be signed into law. The package would provide $1,400 checks for most Americans and direct billions of dollars to schools, state and local governments, and businesses.
In other trading, U.S. benchmark crude oil CLJ21, 1.29% gained 53 cents to $64.97 per barrel in electronic trading on the New York Mercantile Exchange. It picked up 43 cents to $64.44 per barrel on Wednesday. Brent crude BRNK21, 1.34%, the international standard, gained 56 cents to $68.46 per barrel.
The U.S. dollar USDJPY, 0.10% was at 108.52 Japanese yen, up from 108.41 yen on Wednesday.