Asia’s major stock indexes struggled to agree on cues on Friday with the patchy US inflation outlook, a Wall Street tech rally, China’s ongoing property woes and the downbeat global economic picture all having an impact.
Many investors were scratching around for clues on the timing of Federal Reserve interest rate cuts after a mild reading for producer price inflation kept alive hopes for some easing this year.
But markets now expect fewer than two quarter-point reductions to the Fed funds rate this year, below the three cuts Fed officials had pencilled in last month, following Wednesday’s CPI shock.
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Nevertheless, Japan’s Nikkei share average ended higher as its chip-related stocks tracked US technology shares overnight, while a decline in Uniqlo-parent Fast Retailing limited gains.
The Nikkei share average was up 0.21%, or 80.92 points, closing at 39,523.55, and posting a 1.41% weekly gain. The broader Topix was ahead 0.46%, or 12.68 points, at 2,759.64.
China stocks tracked other Asian markets lower as traders scaled back their bets for a slew of US rate cuts this year.
Market participants were also betting on disappointing China trade data, which came out later in the day and showed exports from China fell sharply in March, while imports also suffered an unexpected drop.
China’s blue-chip CSI300 index was down 0.81%, with its financial sector sub-index lower by 0.8%, the consumer staples sector down 0.75%, the real estate index down 2.39% and the healthcare sub-index down 0.47%.
For the week, China’s CSI300 lost 2.1% so far, set to log its worst week since February 2.
The Shanghai Composite Index fell 0.49%, or 14.77 points, to 3,019.47, while the Shenzhen Composite Index on China’s second exchange lost 0.81%, or 13.88 points, to close 1,707.71.
Chinese H-shares listed in Hong Kong fell 1.49% to 5,914.24, while the Hang Seng Index dropped 2.18%, or 373.34 points, to 16,721.69, as property stocks weighed.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Mumbai, Singapore and Wellington were all in the red, while Taipei and Manila edged up.
Dollar Hits 34-Year Yen High
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.67%, cutting its gains for the week to just 0.18%.
Pan-European STOXX 50 futures were pointing 0.7% higher but US stocks futures were flat, following a 0.7% rise for the S&P 500 and 1.7% surge for the tech-focused Nasdaq on Thursday.
The US earnings season kicks off later in the day with big banks including JPMorgan Chase and Wells Fargo. Mega tech reports from next week.
Long-term US Treasury yields stood at 4.5665% in Asian trading, staying close to the overnight high of 4.5930%, a level last seen on November 14.
The climb in yields supported the dollar as it pushed to a 34-year high of 153.32 yen on Thursday. It last changed hands at 153.13 yen, staying weak despite fresh intervention warnings from Japan’s finance minister.
The dollar index, which measures the currency against the yen, euro and four other peers, traded at 105.38, after reaching the highest since November 14 at 105.53 overnight. It has jumped 1.06% this week.
The euro bought $1.07125 after dipping to a nearly two-month trough at $1.0699 on Thursday, when the European Central Bank signalled that rate cuts may come soon.
Gold climbed to a record $2,395.29, with gains this week of 2.6%.
Crude oil prices rose after Iran vowed to retaliate for a suspected Israeli airstrike on its embassy in Syria.
Brent crude futures added 56 cents, or 0.62%, to $90.30 a barrel, while US West Texas Intermediate crude futures gained 67 cents, or 0.79%, to $85.69.
Key figures
Tokyo – Nikkei 225 > UP 0.21% at 39,523.55 (close)
Hong Kong – Hang Seng Index < DOWN 2.18% at 16,721.69 (close)
Shanghai – Composite < DOWN 0.49% at 3,019.47 (close)
London – FTSE 100 > UP 1.21% at 8,020.04 (0934 BST)
New York – Dow < DOWN 0.01% at 38,459.08 (Thursday close)
- Reuters with additional editing by Sean O’Meara
Read more:
China Customs Data: Exports, Imports Saw Big Falls in March
More Stimulus Seen in China After Soft Consumer, Producer Prices
Excess Capacity Claim is Wrong, We’re More Competitive: China
Nikkei, Hang Seng Dip on Fading US Rate Cut Hopes
