SINGAPORE- Asian equities rose to a fresh seven-month high on Thursday, with Hong Kong shares playing catch-up to other markets’ gains as trade resumed after its three-day Lunar New Holiday.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.56 percent to 555.81. Hong Kong’s Hang Seng index was 1.6 percent higher.
Japan’s Nikkei was, however, 0.25 percent lower.
Trading was thin on Thursday with Australia closed for a holiday and certain parts of Asia, including China, still away for the Lunar New Year.
Traders betting that the US Federal will soon tone down its aggressive rate hike policy got a lift after the Bank of Canada on Wednesday became the first major central bank to say it would likely hold off on further increases for now.
After a series of super-sized rate hikes last year, the US central bank is now largely expected to raise rates by a smaller 25 basis points next week on signs that inflation is cooling.
“The US GDP release today will be of key interest to gauge whether the market expectations shifting in favor of a soft landing rather than a recession can continue to hold,” Saxo strategists said in a note to clients.
The prospect of a less aggressive pace in monetary tightening has stoked expectations of a so-called soft landing – a scenario in which inflation eases against a backdrop of weakening but resilient economic growth.
But weak corporate earnings so far have revived worries over the economic impact of the Fed’s restrictive policy and the S&P 500 ended lower overnight.
Boeing Co on Wednesday reported a wider loss for 2022 on weakness in its defense unit as it warned of further supply chain issues, with the US planemaker missing Wall Street expectations on revenue and earnings per share in the final quarter of the year.
Investor attention will also be on the Bank of England and European Central Bank meetings due next week, with traders looking for clues as to when the central banks are likely to turn dovish.
