Asian Equities Rose After US CPI Backs Fed Cut – Asia Market Wrap

Asian stocks rose on Thursday as US shares reversed a two-day drop on benign inflation data, which boosted prospects of a Federal Reserve interest rate cut this month.

Chinese and Japanese stocks led advances in the region, with the MSCI Asia Pacific index rising the most in a week. A barometer of Chinese shares traded in Hong Kong rose up to 2%, while the mainland benchmark CSI 300 Index increased by over 1%. US stock futures edged lower.

The US consumer price index data issued on Wednesday met expectations, confirming estimates that the Fed will lower rates by 25 basis points later in December. Swaps traders have already virtually priced in such a move, compared to a 75% possibility a week earlier. An index of dollar strength dipped Thursday, following a gain on Wednesday that was aided by rising Treasury yields.

Asian shares rebounded after two consecutive monthly losses, as anticipation of additional stimulus measures from Beijing and a potential Fed rate cut boost sentiment. Traders are waiting for news from China’s two-day Central Economic Work Conference, which is likely to sketch out policy for next year following stimulus signals from top authorities.