Asia’s stock benchmark rose to the highest since March 2020 as China’s move to ease some Covid rules supercharged a rally triggered by weaker US inflation.
The MSCI Asia Pacific index rose as much as 4.6%, also on track for its best weekly gain since March 2020. Hong Kong’s benchmark index rose more than 7% after China reduced its quarantine time for incoming travelers and removed Covid flight suspensions, adding to positive sentiment around top leaders calling for a more targeted approach to controlling the coronavirus.
Regionally, chipmakers soared, pushing benchmarks in Taiwan, South Korea, and Japan higher. Local currencies got a boost when the dollar suffered its worst day since 2009 overnight. Bond yields declined as the Federal Reserve appeared closer to moderating its aggressive rate-raising campaign after data showed consumer price increases slowed in October.
“East Asian stocks, more vulnerable to tighter U.S. financial conditions, could benefit more from peak U.S. inflation,” said Frank Benzimra, strategist at Societe Generale SA. “Some Asian central banks are at the end of their tightening cycle and could pivot before the Fed,” such as South Korea and India.
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