# Asian shares gain as fears about rapid Fed hikes, bank crisis fade Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-03-15 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Asian Equities Surge on Relief Rally and U.S. Inflation Data Meta Description: Asian equities surged as US inflation data eases fears, paving way for potential smaller rate hike by Federal Reserve next week. URL: https://financedigest.com/asian-shares-gain-as-fears-about-rapid-fed-hikes-bank-crisis-fadehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-03-15t024216z1lynxmpej2e02rrtroptp4global-markets-1736814316638-compressed.jpg) By Ankur Banerjee SINGAPORE (Reuters) – Asian equities rose sharply on Wednesday, tracking a relief rally on Wall Street and as U.S. [inflation data](https://www.financedigest.com/european-shares-rise-as-us-inflation-data-signals-end-of-rate-hike-cycle.html "European shares rise as US inflation data signals end of rate-hike cycle") delivered no nasty surprises, reinforcing hopes the Federal Reserve will likely go for a smaller rate hike when it meets next week. [Investors piled back into stocks](https://www.financedigest.com/stocks-rise-after-bank-sale-fuels-investor-risk-appetite.html "Stocks rise after bank sale fuels investor risk appetite") in U.S. [markets overnight as fears about contagion in the banking sector](https://www.financedigest.com/improving-reputation-in-the-banking-sector-through-marketing-communications.html "IMPROVING REPUTATION IN THE BANKING SECTOR THROUGH MARKETING COMMUNICATIONS") following the collapse of Silicon Valley Bank (SVB) last week eased. MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.44% higher, having slid 1.7% on Tuesday after [SVB’s collapse](https://www.financedigest.com/swiss-regulator-monitoring-banks-and-insurers-after-svb-collapse.html "Swiss regulator monitoring banks and insurers after SVB collapse") triggered heavy selling by investors in the last few trading sessions. [Australia’s S&P/ASX 200 index rose 0.33% in early trading](https://www.financedigest.com/how-to-begin-investor-trading-in-australia.html "How to begin investor trading in Australia"), while Japan’s Nikkei was mostly flat. Chinese shares were 0.46% higher, while [Hong Kong’s](https://www.financedigest.com/hong-kong-finance-official-to-make-first-visit-to-britain-in-three-years.html "Hong Kong finance official to make first visit to Britain in three years") Hang Seng index rose 1.4%. Data on Wednesday showed China’s industrial output in the first two months of 2023 rose 2.4% from the year earlier, [accelerating from a 1.3% annual rise seen](https://www.financedigest.com/bank-of-canada-seen-on-hold-even-as-economy-accelerates.html "Bank of Canada seen on hold even as economy accelerates") in December. The data slightly missed forecasts for a 2.6% rise in a [Reuters poll](https://www.financedigest.com/european-central-bank-to-raise-deposit-rate-to-3-25-by-mid-year-reuters-poll.html "European Central Bank to raise deposit rate to 3.25% by mid-year: Reuters poll") of analysts. It’s clearly dominated by a relief rally rather than any inflation angst,” said Robert Carnell, regional head of research, [Asia Pacific](https://www.financedigest.com/britains-superdry-sells-asia-pacific-ip-for-50-million.html "Britain’s Superdry sells Asia Pacific IP for million") at ING. I suppose what we’ve got is the [banking sector](https://www.financedigest.com/big-ecb-hike-adds-fuel-to-the-banking-sector-fire.html "Big ECB hike adds fuel to the banking sector fire") in the U.S. returning to stability, with depositors being given the fairly clear signal that they’re not going to lose out.” [Investors were also](https://www.financedigest.com/old-trafford-attracting-not-just-footballers-from-around-the-world-but-also-investors.html "Old Trafford attracting not just footballers from around the world, but also investors") relieved after February’s U.S. inflation report on Tuesday showed consumer prices rising by 0.4%, with a year-on-year gain of 6% – in line with analyst expectations, as there were worries that stronger than expected data might lead the [Fed to go for jumbo-sized hikes](https://www.financedigest.com/wall-street-slips-dollar-gains-as-fed-seen-hiking-rates-in-may.html "Wall Street slips, dollar gains as Fed seen hiking rates in May") to battle inflation. As recently as last week, markets were braced for the return of large [Fed hikes](https://www.financedigest.com/dollar-hits-one-month-high-against-yen-as-traders-bet-on-fed-rate-hike.html "Dollar hits one-month high against yen as traders bet on Fed rate hike") but the swift collapse of SVB has changed those expectations, with market pricing in an 80% chance of a 25 basis point hike next week. It does feel like the 50 basis point move for this [month’s meeting that was speculated about especially after Powell’s](https://www.financedigest.com/european-shares-hit-nine-month-high-dollar-wobbles-after-powell-remarks.html "European shares hit nine month high, dollar wobbles after Powell remarks") commentary to the Senate Banking Committee. Nobody’s expecting that anymore,” said Carnell. U.S. Treasury [yields extended gains](https://www.financedigest.com/global-equities-gain-as-rising-bond-yields-pressure-gold.html "Global equities gain, as rising bond yields pressure gold") into Asian hours after sharp declines at the start of the week. The [yield on 10-year Treasury](https://www.financedigest.com/wall-street-drops-treasury-yields-gyrate-on-fed-chairman-powells-remarks.html "Wall Street drops, Treasury yields gyrate on Fed Chairman Powell’s remarks") notes was up 3.8 basis points to 3.674%. The two-year U.S. [Treasury yield](https://www.financedigest.com/wall-st-flutters-treasury-yields-ease-as-powell-resumes-testimony.html "Wall St flutters, Treasury yields ease as Powell resumes testimony"), which typically moves in step with interest rate expectations, was up 6.9 basis points at 4.294%, but far off last week’s peak of 5.084%. In the currency market, the greenback held steady, with the dollar index, which measures the U.S. currency against six rivals, at 103.64, with the euro unchanged at $1.0732. The Japanese yen [weakened 0.08% to 134.30 per dollar](https://www.financedigest.com/oil-up-2-as-dollar-weakens-on-small-us-fed-rate-hike.html "Oil up 2% as dollar weakens on small US Fed rate hike"), while sterling was last trading at $1.2157, down 0.01% on the day. U.S. crude rose 1.07% to $72.09 per barrel and Brent was at $78.16, up 0.92% on the day. Gold [prices were on edge](https://www.financedigest.com/oil-prices-edge-down-recession-fears-back-in-focus.html "Oil prices edge down, recession fears back in focus"), with spot gold adding 0.1% to $1,904.11 an ounce. (Editing by Sam Holmes) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---