Asian Stocks Rise, Australian Dollar Strengthens on CPI Exceeding Expectations: Market Summary

Stocks in Asia surged today, buoyed by a US tech rally and positive economic data that reignited hopes for US interest rate cuts. The MSCI Asia Pacific Index saw its biggest gain in a month, with markets in Hong Kong, Japan, and South Korea all recording significant increases. Chip-related stocks in the region followed the lead of their American counterparts, with US futures also on the rise.

The Australian dollar strengthened by 0.5% against a weaker greenback after a hot inflation report indicated persistent local price pressures, reinforcing expectations for the central bank to maintain its rates at a 12-year high. The South Korean won led gains among Asian currencies, while Treasuries remained relatively stable.

The recent strong performance of US tech giants, combined with weaker business activity measures in the US, has kept hopes alive for Federal Reserve policy easing this year. Tech earnings in Asia are also in focus as the region enters its busiest week for corporate results.

In the corporate world, London-based Silchester International Investors disclosed a stake in Nikon Corp., causing shares to soar by the most in almost three years. Meanwhile, Tesla Inc. saw a surge in late US trading after striking an optimistic tone despite a sales miss, becoming the first of the “Magnificent Seven” megacaps to report earnings.

Looking ahead, investors are eagerly awaiting earnings reports from Microsoft Corp., Meta Platforms Inc., and Alphabet Inc. this week. The tech megacaps are crucial to the S&P 500, with valuations remaining lofty even after a recent selloff. Key events to watch this week include Indonesia’s rate decision, Malaysia’s CPI, South Korea’s GDP, and Japan’s rate decision and GDP forecasts.