U.S. inflation CPI report, Wall Street, currencies

SINGAPORE — Asia-Pacific markets climbed on Thursday after a better-than-expected inflation report in the US felt stocks spiraling higher.

Australia’s S&P/ASX 200 rose 0.65%.

The Kospi in South Korea was 1.17% higher and the Kosdaq jumped 1.6%.

MSCI’s broadest index of Asia-Pacific shares outside of Japan increased by 0.42%.

Japan’s market is closed for holiday Thursday.

We doubt very much that one monthly data point will be sufficient to get the Fed to drop its hawkish guard.

Brian Martin, Daniel Hynes

ANZ Research

Consumer prices rose 8.5% in July compared to the same period a year ago, a slightly better result than the 8.7% increase that economists polled by Dow Jones were expecting.

The Dow Jones Industrial Average leapt 535.10 points, or 1.63%, to close at 33,309.51. The S&P 500 jumped 2.13% to 4,210.24, and the Nasdaq Composite soared 2.89% to 12,854.80.

“It’s understandable that markets were pleased to see better inflation headlines overnight. But while the change matters, central banks care more about the level of inflation and there’s a long and uncertain path down that mountain,” Brian Martin and Daniel Hynes of ANZ Research wrote in a Thursday note.

“We doubt very much that one monthly data point will be sufficient to get the Fed to drop its hawkish guard,” the note said.

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In company news, SoftBank Group said it would reduce its stake in Chinese tech giant Alibaba through an early physical settlement of prepaid forward contracts for around 242 million American Depository Receipts. The move would add 4.6 trillion yen ($34.6 billion) to its pre-tax gains, SoftBank estimated.

“By setting these contracts early, SBG will be able to eliminate concerns about future cash outflows, and further, reduce costs associated with these prepaid forward contracts,” the company said in a press release.

“These will further strengthen our defense against the severe market environment.”

Separately, Apple supplier Foxconn on Wednesday posted results that beat expectations, but was cautious on the outlook.

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