Asian stocks rise to 7-month highs, hot inflation boosts Australian dollar

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SINGAPORE : Asian equities extended their winning run to scale their highest levels in seven months on Wednesday, with South Korean stocks leading the way, and the Australian dollar hit multi-month highs as surging inflation made higher interest rates more likely.

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.4 per cent to a seven-month high, with South Korean shares gaining 1.3 per cent as trading resumed after the Lunar New Year holidays.

The MSCI gauge has rallied 9 per cent so far this year after slumping nearly 20 per cent in 2022. Trading volume was depressed as Chinese and Taiwan markets were closed for holidays.

Nikkei gained 0.1 per cent and Singapore jumped 1.7 per cent.

Globally, stocks have posted strong gains this year after a torrid 2022, based on expectations that inflation is close to peaking and the rise in U.S. interest rates will taper off. The dismantling of COVID controls in China and the re-opening of its borders have further boosted investor sentiment.