Asia-Pacific markets opened higher on Wednesday as investors welcomed weaker-than-expected U.S. inflation data, which lifted technology stocks and eased concerns that the Federal Reserve could resume raising interest rates. Renewed optimism around artificial intelligence-linked stocks also supported sentiment across regional markets.
South Korea's Kospi led gains with a 6.33% jump, while Japan's Nikkei 225 advanced 0.73%. Australia's ASX 200 rose 0.47%, while China's Shanghai Composite edged 0.01% lower.
Investors took their cue from Wall Street, where softer June inflation and an encouraging start to the U.S. earnings season reignited buying in technology shares after recent volatility. The inflation data strengthened expectations that the Federal Reserve has more room to keep interest rates unchanged, helping revive enthusiasm for artificial intelligence-related stocks.
However, geopolitical risks remained firmly in focus. Oil prices extended gains for a third straight session after the U.S. launched fresh airstrikes against Iran and reinstated a blockade on the country's ports and coastal areas, according to U.S. Central Command.
Brent crude climbed 1.8% to trade above $86 a barrel after surging 11% over the previous two sessions as investors assessed the potential impact of the conflict on global energy supplies.
President Donald Trump also withdrew his proposal to levy a 20% protection fee on cargo passing through the Strait of Hormuz under U.S. military escort. Instead, he said Gulf nations would compensate the United States through investments. The decision followed opposition from the shipping industry, while the International Maritime Organization maintained that mandatory transit charges through the strategic waterway would violate international rules.
Markets also tracked broader moves across asset classes. U.S. Treasury yields stabilised after falling sharply in the previous session as traders scaled back expectations of near-term Federal Reserve rate increases. The U.S. dollar weakened against all other Group-of-10 currencies, while gold held near $4,050 an ounce after Tuesday's advance.
Investors are expected to remain focused on developments in the Middle East and the U.S. inflation outlook, with both factors likely to shape risk appetite and commodity prices in the coming sessions.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.