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Chipmaker Nvidia beats expectations, shares jump 9%
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MSCI AxJ index +0.7%; S&P 500 futures +0.5%
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BOK pauses year-long run of hikes
By Tom Westbrook SINGAPORE, Feb 23 (Reuters) - Asian stock markets eked gains on Thursday after better-than-expected revenue at chip giant Nvidia helped the sector in Taiwan and South Korea and offset worries that strong economic data so far this year is a harbinger of even more rate hikes. MSCI's broadest index of Asia-Pacific shares outside Japan touched its lowest level since Jan. 6 in early trade, but rose about 0.7% as the day wore on.
Nasdaq futures rose 0.9% thanks to Nvidia's revenue beat and rosy outlook which sent its shares up nearly 9% after-hours. Shares in the giant Taiwan Semiconductor Manufacturing Co rose 2.2% to lift Taiwan's benchmark 1.3%. A 4% gain for SK Hynix and a 2% gain for Samsung drove South Korea's Kospi 1% higher. Currencies in South Korea and Taiwan each rose sharply. "The semiconductor sector has been troubled, but signs of recovery are picking up," said Kiyong Seong, lead Asia macro strategist at Societe Generale in Hong Kong. "Markets have positioned for a recovery in the second half of this year so anything supportive of that is helpful for prices." The Bank of Korea also offered some relief by ending a year-long run of uninterrupted rate hikes with a pause - as expected.
Currency trade was lightened by a holiday in Japan but the drift was in line with the broader mood - sending the dollar down a little bit in favour of riskier currencies. The Australian and New Zealand dollars each bounced about 0.5% on the dollar, pushing the Aussie to $0.6842 and the kiwi to $0.6251. The euro hovered around $1.0622 and the yen traded at 134.77 to the dollar. The Singapore dollar fell slightly after inflation accelerated a little slower than expected. The resumption of Japan trade on Friday could be bumpy as Japanese CPI data is due and investors - who are speculating that a policy shift is nigh - will be positioning ahead of a parliament appearance by incoming central bank governor Kazuo Ueda. Treasuries were untraded owing to Thursday's holiday.
HIGHER FOR LONGER Signals elsewhere were less reassuring as this year's run of strong economic data has investors worrying interest rates will need to keep rising and stay high to put the brakes on inflation.
Oil nursed sharp Wednesday losses, and Brent crude futures clung to support around $80 a barrel on Thursday. Results season drove stock movements in Australia. Flag carrier Qantas Airways posted a record first-half profit but shares suffered their biggest drop in a year - down 7.3% - after the company warned fares would probably fall. Wall Street indexes fell overnight and are eyeing their worst week of the year so far as stronger-than-forecast U.S. labour, inflation, retail sales and manufacturing figures have traders pricing interest rates staying higher for longer. Minutes from this month's Federal Reserve meeting - reinforcing a hawkish tone - did little to shift the concern.
"Markets have been forced to reprice interest rate expectations, not just higher, but also questioning the view that once peak rates are hit, central banks will pivot quickly to cutting interest rates," said ANZ economist Finn Robinson. "Economic resilience is to be lauded," he said. "But central banks are uncomfortable with current levels of aggregate expenditure and labour market demand ... if the upcoming run of February data for the U.S. confirm robust economic activity, it is difficult to see how risk will recover in the near term."
Gold steadied at $1,825 an ounce. Final European inflation and U.S. growth figures are due later in the day, though no major tweaks to preliminary numbers are expected. Fed officials Mary Daly and Raphael Bostic are also due to make appearances later on Thursday. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates YTD Global asset performance Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Tom Westbrook; Editing by Stephen Coates)
