Asia Markets Rise Ahead of US Inflation Report

Bangkok, Dec 12 (AP) Asia markets opened higher following a positive close on Wall Street. Investors are eagerly awaiting a crucial US inflation report later in the day, which will likely set the tone for the Federal Reserve's final meeting of the year on Wednesday.

US futures and oil prices advanced.

Tokyo's Nikkei 225 added 0.5 per cent to 32,959.50. Data released on Tuesday showed the wholesale prices in Japan rose by 0.3 per cent from the previous year in November, which marked the slowest rate of increase in almost three years, suggesting a moderation in inflationary pressure in the economy.

Hong Kong's Hang Seng gained 1.1 per cent to 16,367.00, and the Shanghai Composite edged 0.1 per cent higher, to 2,993.65.

Chinese leaders are holding an annual economic conference expected to wrap up on Tuesday with pledges to spur stable growth.

In Seoul, the Kospi was up 0.4 per cent at 2,534.15. Australia's S and P/ASX 200 climbed 0.5 per cent to 7,233.90.

India's Sensex gained 0.2 per cent, while the SET in Bangkok lost 0.3 per cent.

On Monday, the S and P 500 rose 0.4 per cent to 4,622.44, finishing at its highest level in 20 months. The Dow gained 0.4 per cent to 36,404.93 and the Nasdaq added 0.2 per cent to close at 14,432.49.

The muted gains follow a six-week winning streak by the major stock indexes. The S and P 500 is up 20.4 per cent for the year and the Nasdaq is up 37.9 per cent.

Cigna surged 16.7 per cent for the biggest gain among S and P 500 stocks after the health insurer announced a USD 10 billion stock buyback, and the Wall Street Journal reported that the company is no longer pursuing a merger with Humana.

Macy's jumped 19.4 per cent following reports that an investor group is launching a bid to take the storied retailer private for USD 5.8 billion.

On Tuesday, the government will release its November report on consumer inflation. Analysts expect the report to show that inflation continued slowing to 3.1 per cent from 3.2 per cent in October.

On Wednesday, the government will release its November report on inflation at the wholesale level, which is also expected to show that the rate of inflation is easing.

Wall Street is overwhelmingly betting that the Fed will keep its benchmark interest rate at a range of 5.25 per cent to 5.50 per cent into early 2024 and could start cutting rates by the middle of that year.

Analysts are also becoming more comfortable with the possibility that the central bank can pull off a “soft landing”, which refers to inflation easing under high interest rates without the economy falling into a recession.

“With inflation coming down faster than expected, it now appears likely that the Fed will refrain from additional rate hikes," Brian Rose, a senior US economist at UBS, said in a note to investors. “At the same time, inflation is still too high and the labour market is still too tight for the Fed to consider cutting rates soon.”

Strong consumer spending and a solid jobs market have provided a bulwark to the broader economy, where growth has slowed but has so far avoided stalling. The government's jobs report on Friday showed that US employers added more jobs last month than economists expected. Workers' wages also rose more than expected, and the unemployment rate unexpectedly improved.

Several big companies will report their earnings this week and are among the few remaining to release their results. Software company Adobe will report on Wednesday and Olive Garden owner Darden Restaurants will release its results on Friday.

Treasury yields were little changed. The yield on the 10-year Treasury held steady at 4.22 per cent.

In energy trading, US benchmark crude oil added 25 cents to USD 71.57 per barrel in electronic trading on the New York Mercantile Exchange. It gained 0.1 per cent on Monday. Brent crude, the international standard, picked up 24 cents to USD 76.27 per barrel.

The US dollar fell to 145.60 Japanese yen from 146.16 yen. The euro rose to USD 1.0769 from USD 1.07613.