Asian stocks gain ahead of US inflation report | World

BEIJING (AP) — Asian stocks followed Wall Street higher on Tuesday before data traders hoped the surge in U.S. inflation abated in August, reducing pressure for further interest rate hikes.

Shanghai, Tokyo, Hong Kong and Sydney grew. Oil prices fell slightly.

Wall Street’s benchmark S&P 500 index gained 1.1% on Monday for its fourth daily gain.

Investors were waiting for data from the US government which they hope would say inflation peaked at 9.1% in four decades in June and fell further after dropping to 8.5% in July.

Such a cut could help the Federal Reserve avoid having to raise interest rates further to a level that could tip the US economy into recession.

The report “will likely show some relief from price pressure but not prevent the Fed from maintaining an aggressive stance,” Oanda’s Edward Moya said in a statement.

The Shanghai Composite Index gained 0.4% to 23,274.57 and the Nikkei 225 in Tokyo added 0.2% to 28,589.11. The Hang Seng in Hong Kong rose 0.7% to 19,489.43.

The Kospi in Seoul climbed 2.6% to 2,445.99 and Sydney’s S&P-ASX 200 rose 0.6% to 7,002.00.

New Zealand fell while Southeast Asian markets rose.

On Wall Street, the S&P 500 rose to 4,110.41. The Dow Jones Industrial Average gained 0.7% to 32,381.34. The Nasdaq composite rebounded 1.3% to 12,266.41.

On Wednesday, the US government is due to report August inflation at the wholesale level.

Fed officials have affirmed their support for substantial rate hikes and keeping borrowing costs high long enough to ensure inflation is extinguished.

Investors are hoping lower inflationary pressures will prompt the Fed to pull back. Similar hopes were dashed when President Jerome Powell said in August that rates would remain high.

Surveys show traders expect the Fed this month to hike rates for the fifth time this year and by 0.75 percentage points, three times its usual margin. Next, traders expect the U.S. central bank to hold rates steady through the first half of 2023.

In energy markets, benchmark U.S. crude fell 7 cents to $87.71 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 99 cents to $87.78 on Monday. Brent crude, the price basis for international oil trade, fell 12 cents to $93.88 a barrel in London. It gained $1.16 the previous session at $94.

The dollar eased to 142.45 yen from 142.73 yen on Monday. The euro fell from $1.0117 to $1.0130.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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