--- title: "Asia stocks follow US shares higher, dollar steady: markets wrap" description: "Stocks in Asia edged higher on Wednesday following a late rally in US shares in a volatile session after Federal Reserve chair Jerome Powell rebuffed an opportunity to tamp down investor optimism." 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/2023-02-08-asia-stocks-follow-us-shares-higher-dollar-steady-markets-wrap/" published: "2023-02-08T06:03:47" lang: "en-ZA" word_count: 415 --- # Asia stocks follow US shares higher, dollar steady: markets wrap > Stocks in Asia edged higher on Wednesday following a late rally in US shares in a volatile session after Federal Reserve chair Jerome Powell rebuffed an opportunity to tamp down investor optimism. By Bloomberg · Published 8 February 2023, 08:03 SAST ## Key points - Equities across the Asia-Pacific region advanced on Wednesday, pushing the regional benchmark higher despite fluctuating trading in Hong Kong, mainland China and Japan. US futures were largely flat after the S&P 500 gained more than 1% Tuesday. The Fed's comments that further rate hikes will be needed if labor market remains strong weighed on Treasury yields, while the dollar remained steady. Meanwhile, Adani company shares rose sharply following Hindenburg Research's report two weeks ago and investors have begun snapping up Adani bonds. Oil prices extended gains after Tuesday's 4.1% surge boosted by demand from China. Joe Biden is set to address a joint session of Congress tonight and traders will be watching for any signs of renewed tensions with China amid the debt ceiling showdown with House Republicans. - Equities in Australia and South Korea advanced, pushing a region-wide benchmark higher. - US bond yields dropped following comments from Fed Chairman Powell. - The Aussie dollar rose after the Reserve Bank of Australia raised interest rates. - Investors will be paying close attention to Adani companies, while oil prices extended gains on Chinese demand. ## Content Equities in Australia and South Korea advanced to push a region-wide benchmark of shares higher despite fluctuating trading in Hong Kong, mainland China and Japanese shares. US futures were largely flat after the S&P 500 advanced more than 1% Tuesday. The tech-heavy Nasdaq 100 outperformed major benchmarks, climbing more than 2%. Australian bonds dropped in early trading following [declines](https://www.bloomberg.com/news/articles/2023-02-07/powell-says-further-rate-hikes-needed-amid-strong-labor-market) in Treasuries on Tuesday, which partly reversed in early Wednesday trading. An index of the dollar was steady after its fall on Tuesday snapped a three-day rally. The yen steadied after rallying more than 1% on Tuesday, while the Aussie edged higher after also gaining more than 1% following the Reserve Bank of Australia’s decision to increase interest rates on Tuesday. Powell’s sober comments echoed those made after last week’s FOMC meeting, soothing traders who were expecting the Fed chief to push back on the loosening of financial conditions and Friday’s bumper jobs report. Powell highlighted that disinflation has begun, and that further hikes will likely be needed if the jobs market remains strong. In separate comments, Minneapolis Fed president Neel Kashkari said the Fed would likely have to [raise interest rates](https://www.bloomberg.com/news/articles/2023-02-07/fed-s-kashkari-says-strong-jobs-data-show-need-for-more-hikes) to 5.4% at the top of its target range given the strength in the US jobs market. The Fed increased rates 25 basis points last week to a band of 4.5% to 4.75%. “The important takeaway is that Powell had a chance to signal a shift to a more aggressive posture and he didn’t take it,” wrote Bill Adams, chief economist for Comerica Bank in Dallas. “In the near-term, the Fed will likely continue to make one \[or perhaps two\] more hike\[s\] before going on hold.” Investors will be paying close attention to shares in Adani companies after its flagship jumped by the most since Hindenburg Research’s scathing report two weeks ago. Hedge fund and distressed debt investors have begun [snapping up](https://www.bloomberg.com/news/articles/2023-02-07/distressed-funds-including-oaktree-davidson-kempner-scoop-up-adani-bonds) Adani company bonds. Ratings firm Moody’s said in a report that Indian banks’ exposure to the Adani Group is not large enough to affect their [credit quality](https://www.bloomberg.com/news/articles/2023-02-07/moody-s-sees-limited-risks-from-adani-exposure-of-indian-banks). Elsewhere in markets, the price of oil extended gains after a 4.1% surge on Tuesday, its biggest one-day move since November, helped along by a rebound in [demand from China](https://www.bloomberg.com/news/articles/2023-02-07/china-s-oil-majors-857-hk-386-hk-in-comeback-powered-by-covid-exit-exports). Traders will also keep a close eye on Joe Biden’s [speech](https://www.bloomberg.com/news/articles/2023-02-07/biden-to-address-nation-under-shadow-of-china-debt-tensions) to a joint session of Congress on Tuesday evening in Washington in light of renewed tensions with China and a brewing showdown with House Republicans over raising the federal debt ceiling. **BM/DM**