Asian Stocks Rise as Soft US Inflation Readings Boost Sentiment

Hong Kong and most other Asian stocks rose on Friday as another soft US inflation reading solidified expectations that the Federal Reserve will hold off hiking interest rates. The advances tracked a healthy lead from Wall Street, where the S&P 500 ended at a record and the Nasdaq saw its highest close since June after data showed the producer price index slowed sharply in July.

The producer price index (PPI) reading came in below forecasts, compounding bets on the Fed standing pat at its meeting next month. The previous day's consumer price index (CPI) reading also pointed to easing inflationary pressure and last Friday's jobs report showing 23,000 positions were lost in July.

Investors are now pricing in a less than 40 percent chance of a September rate hike, compared with 50 percent last week. 'A few weeks ago, traders were being asked to justify why the Fed should not hike again,' said Stephen Innes, global strategist at Quintex Intel.