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TOKYO, Jan. 5 (AP) – Asian stocks were mostly higher after a rally on Wall Street, as investors assessed minutes from the Federal Reserve’s latest meeting of policymakers and cheered encouraging U.S. jobs data.
Concerns over a Chinese economic slowdown weighed on regional sentiment.
Japan’s benchmark Nikkei 225 rose 0.9 percent to 25,943.93 in early trade. Australia’s S&P/ASX 200 inched up 0.1 percent to 7,068.60. South Korea’s Kospi rose 0.6 percent to 2,268.29. Hong Kong’s Hang Seng rose 2.3 percent to 21,274.44, while the Shanghai Composite rose 0.6 percent to 3,143.63.
“Despite a positive close on Wall Street, the fading of earlier gains and modest moves in U.S. stock futures this morning are contributing to a more solid upside in the Asian session,” IG market analyst Yeap Jun Rong said in a note.
The government will release its weekly unemployment report on Thursday and its closely watched monthly jobs report for December on Friday. The strong jobs data was seen as a sign of inflationary pressures that support further rate hikes by the Federal Reserve.
China’s widespread COVID-19 cases have cast a cloud over a prolonged slump in its real estate sector and the impact of only recently loosened pandemic restrictions as the virus spreads in its worst nationwide outbreak to date.
“Retail sales should generally be weaker in December compared to the previous month,” said Robert Carnell, head of research for Asia Pacific at ING. He said demand could rebound during the Lunar New Year later this month.
“After the long holiday, there could be more COVID cases every day, and then another quiet month for retail. The road to recovery may not be smooth for retailers,” he said.
On Wall Street, major indexes rose after a government report showed job vacancies rose more than expected in November. Stocks then pared some gains after minutes from last month’s Fed meeting highlighted how the central bank is keeping interest rates high to keep inflation down.
The S&P 500 rose 0.8% to 3,852.97, with more than 80% of stocks rising. The Dow Jones Industrial Average rose 0.4% to 33,269.77 and the Nasdaq Composite gained 0.7% to 10,458.76. Shares of smaller companies outperformed, with the Russell 2000 gaining 1.2 percent to 1,772.54.
Banks, companies reliant on consumer spending and communications stocks accounted for much of the rally. Citigroup rose 2.6 percent, Starbucks rose 3.6 percent and Netflix rose 4.9 percent.
The Fed last month raised its key short-term interest rate for the seventh time in 2022 and signaled more hikes to come. The increase was smaller than in the previous four meetings, reflecting signs that inflation, while still elevated, has been moderating.
A fall in inflation to 7.1% in November from a peak of 9.1% in June provided little comfort after minutes of a mid-December meeting showed that Fed officials remained determined to keep interest rates high.
The Fed’s benchmark lending rate is in a range of 4.25% to 4.5%, close to zero after raising rates seven times last year. It forecast rates in a range of 5% to 5.25% by the end of 2023 and did not call for a rate cut until 2024.
Layoffs have been rising in the tech industry, which is dealing with falling demand as inflation squeezes consumers.
Investors cheered several companies that have laid off workers due to weak demand. Cloud computing software company Salesforce announced layoffs of about 10%, the stock rose 3.6%. Video hosting platform Vimeo jumped 4% after notifying employees of layoffs, according to reports.
In energy trading, benchmark U.S. crude rose 85 cents to $73.79 a barrel in electronic trading on the New York Mercantile Exchange. It was down $4.09 on Wednesday. Brent crude, the internationally priced benchmark, rose 77 cents to $78.61 a barrel. U.S. crude oil settled down 5.3 percent on Wall Street.
In currency trades, USD/JPY fell to 131.87 yen from 132.56 yen. The euro traded at $1.0620, just above $1.0610. (Associated Press)
(This is an unedited and auto-generated story from a Syndicated News feed, the body of content may not have been modified or edited by LatestLY staff)
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