Asian Markets Rise Ahead of Earnings Reports and US Inflation Data
Asian shares mostly rose on Monday as investors awaited earnings reports from major global companies and a key US consumer prices report that will gauge inflation levels.
Japan's Nikkei 225 jumped 1.3% to 39,505.33, while Australia's S&P/ASX 200 gained 0.3% to 7,798.10. South Korea's Kospi rose 0.3% to 2,723.54, and Hong Kong's Hang Seng added 0.8% to 16,856.06. The Shanghai Composite remained relatively flat, edging up less than 0.1% to 3,071.13.
Analysts attributed the gains to a rebound in risk sentiment after recent jitters. However, they cautioned that the upcoming US consumer price index report could introduce some reservations, potentially limiting further gains.
The US government is scheduled to release its March consumer prices report later this week. The report will provide crucial insights into inflation levels, which have been a major concern for investors and policymakers.
Strong US Jobs Report Boosts Wall Street
Wall Street ended last week on a positive note, with the S&P 500 rising 1.1% and the Dow Jones Industrial Average gaining 0.8%. The Nasdaq composite also climbed 1.2%, driven by a rally in technology stocks.
The gains followed a surprisingly strong US jobs report, which showed that employers added 303,000 workers to their payrolls in March. The robust job market has fueled consumer spending and earnings growth, contributing to overall economic growth.
However, concerns remain about the potential for inflation to remain above the Fed's target rate of 2%. Strong employment and consumer spending could make it challenging to bring inflation down to the desired level.
Energy Prices Rise Amid Economic Recovery and Supply Concerns
Analysts also noted that energy prices have been rising lately, adding to inflationary pressures. This is particularly concerning for economies like Japan, which imports almost all its oil.
The upward pressure on energy prices is attributed to signs of economic recovery in various regions, leading to increased energy consumption. Additionally, concerns about supply and political tensions tend to push prices higher.
Despite the recent increase, benchmark US crude fell $1.27 to $85.64 a barrel on Monday, after rising 0.4% on Friday. Brent crude, the international standard, declined $1.41 to $89.76 a barrel.