SINGAPORE Asian stock markets gained on Thursday after better than expected revenue at chip giant Nvidia helped the sector in Taiwan and South Korea and offset worries that strong economic data so far this year is a harbinger of even more rate hikes.
MSCI's broadest index of Asia-Pacific shares outside Japan touched its lowest level since January 6 in early trade, but rose about 0.7 percent as the day went on.
Nasdaq futures rose 0.9 percent thanks to Nvidia's revenue beat and rosy outlook, which sent its shares up nearly 9 percent after-hours.
South Korea's Kospi was 1 percent higher because of a 4 percent gain for SK Hynix and a 2 percent gain for Samsung. Kiyong Seong, a lead Asia macro strategist at Societete Generale in Hong Kong said that the semiconductor sector has been troubled but signs of recovery are picking up. The markets are poised for a recovery in the second half of this year, so anything supportive of that is helpful for prices. The Bank of Korea also offered some relief by ending a year-long run of uninterrupted rate hikes with a pause, as expected.
A holiday in Japan lightened the currency trade, but the drift was in line with the broader mood - sending the dollar down a bit in favour of riskier currencies.
The Australian and New Zealand dollars each bounced back about 0.5 percent on the dollar, pushing the Aussie to $0.6842 and the Kiwi to $0.6251. The euro was close to $1.0622 and the yen traded at 134.77 to the dollar.
The Singapore dollar fell slightly after inflation accelerated a bit slower than expected.
The resumption of Japan trade on Friday could be bumpy as Japanese CPI data is due and investors are speculating that a policy shift is nigh and will be positioned ahead of a parliament appearance by incoming central bank governor Kazuo Ueda. Due to Thursday's holiday, Treasuries were untraded.
Signals elsewhere were less reassuring as investors worried that interest rates will need to stay high in order to put the brakes on inflation as a result of this year's strong economic data.
Oil suffered sharp Wednesday losses, and the futures of crude oil rallied to support around $80 a barrel on Thursday.
Results season has had a major impact on stock movements in Australia. Flag carrier Qantas Airways posted a record first-half profit but the shares suffered their biggest drop in a year -- down 7.3 percent -- after the company warned fares would probably fall.
Wall Street indexes fell overnight and are eyeing their worst week of the year as stronger than expected US labor, inflation, retail sales and manufacturing figures have traders pricing interest rates to stay higher for longer.
Minutes from this month's Federal Reserve meeting - reinforcing a hawkish tone - did not change the concern.
Markets have been forced to revalue interest rate expectations, not just higher, but also questioning the view that once peak rates are hit, central banks will pivot quickly to cutting interest rates, said Finn Robinson, ANZ economist.
Economic resilience is to be lauded, he said.
If the upcoming February run of February data for the US confirms robust economic activity, it is hard to see how risk will recover in the near term, as central banks are uncomfortable with current levels of aggregate expenditure and labor market demand. The finals of the European inflation and US growth figures are due later in the day, though there are no major changes to preliminary numbers. Fed officials Mary Daly and Raphael Bostic are expected to make appearances later on Thursday.