Asian markets extended gains on Wall Street on Thursday as U.S. earnings data that beat forecasts and consumer confidence data eased worries about a deep recession.
As the dust settled after the Bank of Japan’s surprise move from ultra-loose monetary policy, investors went on a mini-Santa rally ahead of the Christmas break, while the yen steadied after its biggest jump in 24 years.
The global gains came after a massive sell-off since the Federal Reserve and European Central Bank signaled last week that they were likely to raise interest rates higher than expected to tackle decades-high inflation.
Investors looking for good news jumped to a survey that showed consumer confidence in the U.S. economy jumped more than estimated in December – to the highest since April – as inflation showed signs of easing and energy prices have cooled down.
That came alongside better-than-expected earnings from Nike and shipping giant FedEx.
Nike, hit by supply chain snarls, also offered an opportunity for the future, saying the worst of the supply glut was “behind us” and that inventories were at their lowest level in four quarters.
All three of Wall Street’s main indexes ended more than a percent higher, while European shares also tumbled.
“The economy is still headed for recession, but consumers continue to show signs of resilience, which could delay a significant drop in stocks,” OANDA’s Edward Moya said in a note.
Asia continued the party on Thursday.
Hong Kong led the way, rising more than two percent, with tech companies following their US peers higher and property shares boosted by comments from top Chinese officials pledging support for the beleaguered sector.
Tokyo, Shanghai, Sydney, Seoul, Singapore, Taipei, Wellington and Manila also fared well.
Stephen Innes of SPI Asset Management added: “The favorable results are also important for the economy – as investors look for signs that the US is headed for recession or that the Fed is successfully planning a soft landing.
“The market is moving toward the idea that we will have a more orthodox 2023, including a much more balanced Fed looking to slow the pace of hikes amid better inflation news.”
Oil prices also rebounded, rising more than 2 percent on Wednesday in response to data showing U.S. inventories fell last week, leaving inventories at an eight-year low, Bloomberg News reported .
China’s economic reopening after nearly three years of a lockdown and mass testing policy without Covid also helped boost crude oil.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: Up 0.4% at 26,26,492.66 (halt)
Hong Kong – Hang Seng: Up 2.6% at 19,654.59
Shanghai Composite: Up 0.9 percent to 3,094.46
Dollar/yen: NAVZD at 131.89 yen from 132.38 yen on Wednesday
EUR/USD: $1.0629 up from 1.0613
Pound/Dollar: It rose to $1.2117 from $1.2082
Euro/pound: BACK at 87.73 pence from 87.81 pence
West Texas Intermediate: Up 0.6 percent to $78.75 a barrel
Brent North Sea crude: up 0.5 percent to $82.59 a barrel
New York – Up 1.6% at 33,376.48 (close)
London – FTSE 100: Up 1.7% at 7497.32 (close)