Asian shares mostly higher after gains on Wall Street

BANGKOK — Shares advanced in Asia on Monday after Wall Street benchmarks ended last week on a high note.

Tokyo’s Nikkei 225 was the outlier, giving up 1.2% to 25,810.10, but other regional indexes were higher.

Bangkok’s SET index jumped 4.3% on forecasts for a turnaround for the economy, which has been battered by the pandemic.

Stocks closed higher Friday on Wall Street as earnings reporting season got underway and CEOs began to show how well or poorly they’re navigating high inflation and a slowing economy.

The year has begun with optimism that cooling inflation trends could get the Federal Reserve to ease off soon on its sharp hikes to interest rates. Such increases can drive down inflation, but they do so by slowing the economy and risk causing a recession. They also hurt investment prices.

Elsewhere in Asia, Hong Kong’s Hang Seng gained 0.7% to 21,898.20 and the Kospi in Seoul jumped 0.9% to 2,408.26. The Shanghai Composite index added 1.4% to 3,241.35.

Australia’s S&P/ASX 200 was up 0.8% to 7,303.70. Taiwan also advanced.

The S&P 500 rose 0.4% to 3,999.09 on Friday after erasing an earlier loss, closing out its best week in two months. It is holding onto a 4.2% gain for 2023 so far.

The Dow Jones Industrial Average rose 0.3% to 34,302.61. The Nasdaq rose 0.7% to 11,079.16.

Slowing segments of the economy and still-high inflation are dragging on profits for companies, which are one of the main levers that set stock prices. Friday marked the first big day for companies in the the S&P 500 to show how they fared during the final three months of 2022, with a bevy of banks at the head of the line.

JPMorgan Chase rose 2.5% after beating analysts’ expectations for earnings and revenue. Bank of America also shook off a morning stumble to rise 2.2% after reporting better results than expected. Bank of New York Mellon rose 1.8% following its earnings release and announcement of a program to buy back up to $5 billion of its stock.

On the losing end was Delta Air Lines, which sank 3.5% after it gave a forecast that thudded onto Wall Street. Despite reporting stronger results for the end of 2022 than expected, its forecast for profit this quarter fell short of analysts’ expectations.

One big worry on Wall Street is that S&P 500 companies may report a drop in profits for the fourth quarter from a year earlier.

If the economy does fall into a recession, as many investors expect, sharper drops for profits may be set for 2023. That’s why the forecasts for upcoming earnings that CEOs give this reporting season may be even more important than their latest results.

A report released Friday morning showed U.S. consumers downshifted their expectations for inflation in the coming year, down to 4%, which is the lowest reading since April 2021. Long-run expectations for inflation, meanwhile, remain stuck in the narrow range of 2.9% to 3.1% that they’ve been in for 17 of the last 18 months, according to preliminary survey results from the University of Michigan.

The Federal Reserve has been intent on such numbers staying low. Otherwise, it could cause a vicious cycle that would only worsen inflation. Consumers could start accelerating their purchases in hopes of getting ahead of higher prices, for example, which would only push prices higher.

In other trading Monday, U.S. benchmark crude oil lost 39 cents to $79.47 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the pricing standard for international trading, gained 6 cents to $82.31 per barrel in London.

The dollar was trading at 127.47 Japanese yen, down from 127.87 yen. The euro bought $1.0860, up from $1.0830.