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Asian shares rise after a strong session on Wall Street

Wall Street

MSCI’s broadest index of Asia-Pacific shares outside Japan added 1.5%, Japan’s Nikkei added 1.2%, Korea’s KOSPI rose 0.8%

Asian shares and European stock futures advanced on Wednesday after a strong session on Wall Street.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 1.5% to its highest in two weeks, helped by a 3.8% gain in Hong Kong-listed tech stocks, especially index heavyweight Alibaba which advanced 6.6%.

Japan’s Nikkei added 1.2%.

Futures indicated the share rally would continue into European and U.S. trading, with the pan-region Euro Stoxx 50 futures up 0.81%, FTSE 100 futures gaining 0.85% and e-mini futures for the S&P 500 0.5% higher.

Overnight, three main Wall Street indexes finished higher with tech stocks including Apple Inc and Microsoft Corp climbing, as did bank stocks supported by the prospect of higher U.S interest rates.

Nonetheless, the Nasdaq Composite is still down 9.2% this year after a brutal January.

Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas, said market volatility was lingering as investors tried to figure out how often, how far and how fast central banks would raise interest rates.

The overarching theme for the market is central banks’ monetary policies, he said. I think volatilities will continue and will possibly increase, but over the longer term corporate balance sheets, particularly in Asian emerging markets look a lot better than they were earlier, he said.

Elsewhere in Asia Pacific, gains in tech names helped Korea’s KOSPI rise 0.8% and Commonwealth Bank of Australia, the country’s largest bank added 5.6% after announcing a A$2 billion (US$1.43 billion) share buyback.

Gains in Hong Kong financials and tech stocks meant the local benchmark rose 2%, unfazed by tighter restrictions to combat a new wave of COVID-19.

However, focus on U.S. inflation figures due Thursday is likely to cap further gains.

Even though we sit in Asia, markets are still eagerly waiting for the Thursday CPI print out of the U.S. so are sitting on their hands right now, said Marcella Chow, Hong Kong based global market strategist at JPMorgan Asset Management.

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