Asian stocks gain after Fed's Powell gives upbeat comments; dollar firmer
- Asian stocks rose in early Wednesday trade.
- Fed Chairman Jerome Powell gave an upbeat assessment of the U.S. economy and indicated that it was “difficult” to forecast how trade disputes would impact the economy.
- The dollar was firmer following Powell’s remarks.
Asian shares rose on Wednesday, tracking gains seen on Wall Street amid earnings season news and following upbeat remarks from Federal Reserve Chairman Jerome Powell during his congressional testimony.
In Tokyo, the Nikkei 225 rose 0.85 percent, adding to three prior consecutive sessions of gains as most sectors advanced in early morning trade. Exporters rose as the yen remained weak, with electric appliances up 1.17 percent and automakers tacking on 1.42 percent.
Over in Seoul, gains on the Kospi, which traded higher by 0.84 percent, were driven by the significant moves higher in tech stocks. Index heavyweight Samsung Electronics rose 2.29 percent and SK Hynix jumped 2.14 percent.
Elsewhere, the S&P/ASX 200 added 0.73 percent, with information technology and materials among the top-performing sectors in early morning trade. Mining major BHP popped 3.08 percent after reporting record full-year iron ore production.
Powell positive on US economy
Gains in Asia came after the Fed’s Powell gave a positive assessment of the U.S. economy during his semi-annual congressional testimony on Tuesday, indicating that gradual interest rate increases were warranted.
Powell also touched on the matter of trade disputes between the U.S. and its trading partners, saying it was “difficult to predict” the implications of those on the economy.
“So the key take away is that trade policy has not yet affected the Fed’s intentions for further gradual hikes. The Fed remains data dependent and the inclusion of the phrase ‘for now’ provides the bank with some flexibility if it needs to alter the interest rate path ahead,” Rodrigo Catril, senior FX strategist at National Australia Bank, wrote in a note.
U.S. stocks rose as earnings season rolled on stateside.
The tech-heavy Nasdaq composite notched a record high on Tuesday before closing up 0.63 percent to 7,855.12 and outperforming other U.S. indexes, which recorded slighter gains.
In the tech sector, Netflix shares closed down by more than 5 percent after missing subscriber growth projections, after dropping by around 14 percent during the New York session. Of note, shares of Amazon touched an all-time high on a report that reflected robust Prime Day sales.
The dollar held onto overnight gains made following Powell’s comments, with the dollar index, which tracks the greenback against a basket of currencies, mostly steady at 95.044. Against the yen, the dollar traded at 112.98 at 8:04 a.m. HK/SIN.
Meanwhile, oil prices were slightly softer. They had dropped more than 4 percent earlier this week. U.S. crude futures slipped 0.46 percent to trade at $67.77 per barrel and Brent crude futures edged down by 0.76 percent to $71.61.
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