Asia’s major stock indexes staged late recoveries on Thursday as the bargain buyers moved in, lifting prices after the region’s indexes spent most of the day in the red.
Stocks had fallen close to a one-month low, still reeling from China’s slip into deflation and as investors looked ahead to a crucial US inflation report that will likely influence the Federal Reserve’s policy path.
Japan’s Nikkei share average ended higher as strong corporate earnings countered concerns ahead of the announcement from the US.
Also on AF: Chinese Tech Giants Rush to Buy Nvidia’s Top AI Chips – FT
The Nikkei index rose 0.84% to close at 32,473.65, after opening 0.58% lower tracking overnight losses on Wall Street. The broader Topix advanced 0.92% to 2,303.51. Japanese markets will be closed on Friday for a holiday.
China and Hong Kong shares edged ahead, despite concerns over the country’s troubled property sector and US President Joe Biden’s ban on investments into Chinese technology, thanks to gains in energy-related stocks and bets on stimulus.
China’s faltering recovery and high youth jobless rate had also dragged key indexes lower early on. The state media reported on Tuesday that almost half of Chinese graduates are ditching mega-cities and returning to their home towns after graduation due to a sagging job market.
The Shanghai Composite Index rose 0.31%, or 10.07 points, to 3,254.56, while the Shenzhen Composite Index on China’s second exchange gained 0.13%, or 2.64 points, to 2,041.41.
The Hang Seng Index inched up 0.01%, or 2.23 points, to 19,248.26 but the Hang Seng Mainland Properties Index fell 2.8%, after property developer Country Garden failed to make $22.5 million in coupon payments due earlier this month, as investors remained sceptical if the debt-laden sector could turn around soon.
China Unicom defied the broader index decline, up 3.28%. It reported first half net profit rose 13.1% to 12.4 billion yuan, and added 5.3 million new mobile subscribers, highest first-half net addition in four years.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Singapore, Mumbai, Wellington, Taipei and Manila were all down, though Jakarta edged up.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.58% and looked set to log a second straight week of losses. A technology sub-index fell to its lowest in two months.
Annual US Inflation Rise Predicted
Futures indicated that European stocks were set for a higher open. Eurostoxx 50 futures rose 0.69%, German DAX futures were up 0.70% and FTSE futures climbed 0.44%.
US CPI is forecast to show headline inflation picking up slightly in July to an annual 3.3%, while the core rate, which excludes the volatile food and energy segments, is forecast to rise 0.2% in July, for an annual gain of 4.8%.
“We are likely to see something we haven’t seen for some time, namely, annual inflation rising,” said Rob Carnell, ING’s regional head of research, Asia-Pacific.
Markets are pricing in a more than 50% chance that the Fed is done with interest rate hikes this year, the CME FedWatch tool shows, as inflation moderates and the prospect of a soft landing increases.
Meanwhile, the yield on 10-year Treasury notes was up 1.3 basis points to 4.020% in Asian hours, while the yield on the 30-year Treasury bond was at 4.187%.
In the currency market, the dollar index, which measures the US currency against six peers, eased 0.02%. The Japanese yen weakened 0.20% to 144.01 per dollar, heading closer to the psychologically key 145 level.
Oil prices eased in Asian trade after touching seven-month peaks in the previous session, as higher US crude inventory and sluggish economic data from China raised concerns about global fuel demand.
US crude fell 0.07% to $84.34 per barrel and Brent was at $87.47, down 0.09% on the day.
Key figures
Tokyo – Nikkei 225 > UP 0.84% at 32,473.65 (close)
Hong Kong – Hang Seng Index > UP 0.01% at 19,248.26 (close)
Shanghai – Composite > UP 0.31% at 3,254.56 (close)
London – FTSE 100 > UP 0.11% at 7,595.67 (0933 BST)
New York – Dow < DOWN 0.54% at 35,123.36 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
Read more:
Weak Demand Pushes China Into Possible Year-Long Deflation
US Set to Outline Ban on Sensitive Tech Investment in China
Hang Seng Bets on Stimulus after Deflation Jolt, Nikkei Falls
