---
title: "Stocks extend Fed-fuelled rise in Asia; dollar dips: markets wrap"
description: "Asian shares advanced with US and Europe futures on Thursday, extending a rally on Wall Street after Federal Reserve chair Jerome Powell said the central bank had made progress in its battle against inflation."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "International Finance"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-02-02-stocks-extend-fed-fuelled-rise-in-asia-dollar-dips-markets-wrap/"
published: "2023-02-02T05:54:29"
lang: "en-ZA"
word_count: 498
---

# Stocks extend Fed-fuelled rise in Asia; dollar dips: markets wrap

> Asian shares advanced with US and Europe futures on Thursday, extending a rally on Wall Street after Federal Reserve chair Jerome Powell said the central bank had made progress in its battle against inflation.

By Bloomberg · Published 2 February 2023, 07:54 SAST

## Key points
- Asian stocks rose on Thursday as investors gained confidence from Federal Reserve Chair Jerome Powell's comments about progress on inflation, which suggest a less harsh monetary policy backdrop. Hong Kong-listed technology companies were among the top performers and the dollar fell against both G10 and emerging-market currencies. Treasury yields dropped about 10 basis points in key maturities across the 2- to 10-year zone, while the Nasdaq 100 closed at its highest since September. In US after-hours trading, Meta Platforms surged, leading social media stocks higher following better-than-expected sales during the holiday quarter. Meanwhile, bonds of India's Adani Group plunged to distressed levels in US trading and gold edged higher after reaching a nine-month high. Bitcoin hit its highest since August as investors interpreted Powell's comments positively. Central banks in Europe will be centre stage later on Thursday with both the ECB and BoE expected to raise rates by half a percentage point each.
- Asian stocks rose, with tech companies leading the charge
- Dollar continues to decline against G10 and emerging-market currencies
- US Treasuries dropped 10 basis points across 2-10 year maturities
- Bitcoin reaches 9 month high as Federal Reserve Chair Jerome Powell signals a less harsh monetary policy

## Content

A benchmark of Asian stocks climbed as much as 1%, with Hong Kong-listed technology companies among the top performers. The picture was more mixed in Japanese and mainland China markets.

The dollar continued its decline against both G10 and emerging-markets currencies. A gauge of the greenback’s strength was at the lowest level since April as global investors positioned for a potential peak in US interest rates.

Treasury yields held a drop from the US session of about 10 basis points in key maturities across the 2- to 10-year zone. Australian and New Zealand bonds broadly tracked the closing moves in Treasuries Wednesday. Japan’s benchmark 10-year yield steadied two basis points below the central bank’s 0.5% ceiling.

[Powell’s](https://www.bloomberg.com/news/articles/2023-02-01/fed-slows-rate-hikes-signals-further-increases-are-coming)comment that the “disinflation process has started” suggested that the aggressive tightening cycle is starting to have its desired effect of reducing the pace of price growth, helping the S&P 500 jump more than 1%. The tech-heavy Nasdaq 100 outperformed major benchmarks, closing at the highest since September.

Positioning in US swaps markets assumes the Fed is getting closer to cutting rates as traders bet that economic conditions are likely to keep it from the additional rate increases that policymakers still anticipate.

“I think the market took what Powell didn’t say and ran with it,” said Karen Jorritsma, head of Australian equities at RBC Capital Markets. “He was pretty clear that he would stay on a restrictive stance as long as was needed and that some signs are coming through in the data although unemployment was at a 50-year low.”

Adding to the positive tone for risk taking, in US after-hours trading, Meta Platforms surged, leading social-media stocks higher, after reporting better-than-expected sales during the holiday quarter.

“US sector performance was consistent with the big rally in fixed income across the curve, which for Asia-Pacific should support duration proxies like tech and soft landing beneficiaries like consumer discretionary,” said Chamath De Silva, senior portfolio manager for BetaShares Holdings.

The focus in Asia is also on the Adani Group’s crisis as the fallout from a short-seller’s research report leads to ever more intense pressure on the indebted conglomerate’s securities.

Bonds of the Indian billionaire Gautam Adani’s flagship firm plunged to distressed levels in US trading, and the company abruptly pulled a record domestic stock offering after shares in the Adani group suffered a $92 billion crash.

Elsewhere in markets, oil staged a partial rebound after slumping on Wednesday as the US dollar fell and traders weighed the potential for better demand in China. Gold edged higher after reaching a nine-month high in the wake of the Fed decision.

Bitcoin hit the highest since August as investors interpreted Federal Reserve Chair Jerome Powell’s comments about progress on inflation as a sign that a less harsh monetary policy backdrop lies ahead.

Later on Thursday, central banks in Europe will be centre stage with both the European Central Bank and the Bank of England expected to raise rates by half a percentage point each. **BM/DM**