Australia

Australian shares are set to open higher, after an industrials-led recovery on Wall Street.

ASX futures were up 0.7% or 52 points as of 8:30am on Thursday, suggesting a higher open.

U.S. stocks ended broadly higher after dropping sharply in the prior session on worries that a hot inflation reading would keep the Federal Reserve from cutting interest rates anytime soon.

DJIA rose 0.4%, or 151 points, to 38424, the S&P 500 gained 1% to 5000 and the Nasdaq climbed 1.3% to 15859.

In commodity markets, Brent crude oil fell 1.5% to US$81.55 a barrel while gold was down 0.1% to US$1,990.90.

In local bond markets, the yield on Australian 2 Year government bonds was up at 3.94% while the 10 Year yield was also up at 4.26%. US Treasury notes were lower, with the 2 Year yield at 4.58% and the 10 Year yield at 4.27%.

The Australian dollar hit 64.88 US cents down from its previous close of 64.51. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 98.96.

Asia

China markets were closed for the lunar new year holidays.

Hong Kong's Hang Seng Index closed 0.8% higher at 15879.38, led by consumer- and leisure-related names. Investors may have adjusted positions as the market resumed trading after the Lunar New Year holidays. Among the advancers, Galaxy Entertainment rose 3.5%, Shenzhou International was 3.1% higher and Li Ning gained 2.9%. Decliners included WuXi AppTec, which lost 19% following news that U.S. lawmakers are seeking investigations into the company and its units, and WuXi Biologics, which shed 9.2%. The Hang Seng Tech Index ended 2.3% higher at 3197.87.

Japan's Nikkei Stock Average fell 0.7% to close at 37703.32, dragged by waning Fed rate-cut prospects following stronger-than-expected U.S. inflation data released overnight. The data have dampened hopes for swift rate cuts by the Fed, Phillip Securities Research team says in a commentary. Among the worst performers on the Japanese benchmark index, Shimano slid 7.0%, Hikari Tsushin dropped 6.8%, and Shiseido lost 4.7%. The 10-year JGB yield was up 3bps at 0.755%.

India's Sensex rose 0.4% to close at 71822.83, reversing earlier losses amid gains in U.S. stock-index futures, which are supportive of risk appetite. The focus now shifts to U.S. January PPI data due Friday, which might help market participants gauge what the core PCE price index, the Fed's preferred inflation measure, could be, Saxo Markets' APAC Strategy Team says in a commentary. Nuvama Wealth Management jumped 13% after its 3Q net profit more than doubled on year. Among other advancers, Mahindra & Mahindra rose 1.0% and Nestle India added 1.4%.

Europe

European shares rose after U.K. inflation came in lower than expected, while Asia traded mixed and Wall Street looked set for gains. The Stoxx Europe 600 advanced 0.3%, the FTSE 100 rallied 0.8%, the CAC 40 rose 0.4% and the DAX edged 0.1% higher. Hong Kong's Hang Seng rose 0.8%, but most markets elsewhere fell. Despite higher utility prices and positive base effects, underlying U.K. CPI inflation momentum was slightly below average, HSBC says. "This is welcome, but still hawkish jobs and pay data suggests a sustainable return to 2% inflation isn't yet assured," HSBC economist Chris Hare writes.

The FTSE 100 finished the session 0.8% higher on Wednesday at 7,568.40 points, boosted by below-forecast U.K. inflation data pausing the sell-off in global markets prompted by a disappointing CPI reading from the U.S. "The past 24 hours have been full of surprises, and this morning's U.K. inflation data certainly caught markets on the hop," IG analyst Chris Beauchamp writes in a market comment. "Rapid deceleration in price growth has hit the pound hard, as it seems a BOE rate cut has become a much more likely event in the first half of the year," he adds.

North America

U.S. stocks ended broadly higher after dropping sharply in the prior session on worries that a hot inflation reading would keep the Federal Reserve from cutting interest rates anytime soon.

DJIA rose 0.4%, or 151 points, to 38424, the S&P 500 gained 1% to 5000 and the Nasdaq climbed 1.3% to 15859.

Industrials led the gains among S&P 500 sectors, while big cap tech shares were mostly higher as well. Energy stocks fell as oil prices snapped a seven-day winning streak following a big increase in weekly supply data.

The dollar weakens and the 10-year yield falls 0.049 percentage point to 4.266%.