By Ambar Warrick
Investing.com-- Asian stocks rallied on Thursday, tracking overnight gains on Wall Street after weaker-than-expected U.S. inflation, while Singapore stocks lagged on concerns over slowing growth in the island state.
The tech-heavy Hang Seng index in Hong Kong was the best performer in Asia, surging nearly 2% by 0009 ET (0409 GMT). Tech heavyweights Baidu Inc (HK:9888), Tencent Holdings Ltd (HK:0700) and Alibaba Group Holding Ltd (HK:9988) added between 1.3% to 4%.
India’s bluechip Nifty 50 index also rose on strength in tech majors Infosys Ltd (NS:INFY) and Wipro Ltd (NS:WIPR).
China’s bluechip Shanghai Shenzhen CSI 300 jumped 1.5%, recovering from sharp losses in the prior session after data showed producer price inflation in the country fell in July.
Broader Asian stocks tracked a Wall Street rally after softer-than-expected U.S. inflation data drove expectations that the Federal Reserve will hike rates at a slower pace this year.
Tech stocks- which have been hit the hardest by rising rates this year- were the biggest overnight gainers. The Nasdaq Composite index rallied nearly 3%.
Investors are now pricing in a 50 basis point hike by the Fed in September, down from earlier expectations of a 75 basis point hike.
But despite the dovish inflation reading, Fed officials warned that more tightening was warranted this year. CPI inflation, which grew at an annual rate of 8.5% in July, is still far above the Fed’s target range of 2%.
Fears of more policy tightening saw Asian currency markets largely lag equities.
Singapore stocks lagged their regional peers after the island state lowered its economic growth outlook for the year to a range of 3% to 4%, from 3% to 5%.
MSCI Singapore fell 0.8%, and was the worst performing Asian benchmark for the day.
The country is facing headwinds stemming from a series of COVID-19 lockdowns in China- its biggest trade partner. This also saw Singapore’s second-quarter GDP revised lower to 4.4% from 4.8%.