Asian stocks rise as Fed fears ease, India held back by Adani

By Ambar Warrick 

Investing.com-- Most Asian stock markets rose on Thursday, with technology shares gaining the most after the Federal Reserve’s latest meeting drove up expectations for an eventual dovish tilt by the central bank, while Indian markets lagged amid renewed losses in Adani Group.

Technology-heavy bourses were the best performers for the day, with the Taiwan Weighted index and the KOSPI rising 1.1% and 0.8%, respectively. Hong Kong’s Hang Seng index also advanced 0.4%. 

The Federal Reserve raised interest rates as expected on Wednesday, and signaled that it will keep hiking rates to curb inflation. But this spurred expectations that the ensuing economic fallout will push the bank into potentially cutting interest rates by as soon as late-2023. 

Most risk-driven markets rallied on this notion, with Wall Street indexes also gaining overnight. The tech-heavy NASDAQ Composite logged the biggest gains among its peers.

The prospect of a Fed pivot is especially attractive to Asian equities, after they were battered by surging interest rates through 2022. 

Indian stocks lagged their peers, with the Nifty 50 and BSE Sensex 30 indexes trading in a flat-to-low range. Losses were centered largely around firms under the Adani Group along with industrials and bank stocks exposed to the conglomerate, after it abruptly withdrew a $2.5 billion share offering by its flagship firm, Adani Enterprises Ltd (NS:ADEL). 

Indian markets were also digesting the 2023 budget, which was released on Wednesday. The budget outlined more income tax breaks, and also flagged increased government spending this year.

Consumer goods giant ITC Ltd (NS:ITC) was the best performer on both Indian indexes, rising 5.5% to a record high, while tech heavyweights including Infosys Ltd (NS:INFY) and HCL Technologies Ltd (NS:HCLT) also gained.

Chinese stocks lagged their peers amid lingering uncertainty over an economic recovery in the country this year. Government and private PMI data sets released this week painted a mixed picture of the economy after Beijing relaxed most anti-COVID measures earlier this year.

The Shanghai Shenzhen CSI 300 index fell 0.3%, with losses in major investment houses and industrial stocks weighing the most, while the Shanghai Composite index rose 0.1% as strength in major technology stocks helped offset broader losses.

Focus now turns to upcoming central bank meetings in the Eurozone and the UK, which are expected to result in more interest rate hikes. Markets are also awaiting a slew of earnings from major Chinese firms in the coming weeks.