Asian shares saw a mixed day to end the week with Chinese markets finally running out of puff after a rollercoaster week of ups and downs following Beijing’s ‘bazooka’ stimulus blitz.
Equities across the region were headed for their first weekly loss in five, and all eyes will be on the details of more much-anticipated fiscal stimulus from Beijing this weekend.
Investors’ enthusiasm about China’s economic stimulus announced last month has given way to concerns about whether the policy support would be big enough to revive growth, putting the spotlight on whether the finance ministry will announce significant fiscal stimulus at a press conference on Saturday.
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China’s blue chips fell 2.77% and were down 2.3% for the week. Hong Kong’s Hang Seng, which was closed for a public holiday, fell 6.5% for the week, the biggest weekly drop in two years.
The Shanghai Composite Index lost 2.55%, or 84.19 points, to 3,217.74, while the Shenzhen Composite Index on China’s second exchange dropped 3.94%, or 75.33 points, to 1,834.94.
Ting Lu, chief China economist at Nomura, said markets were “laser-focused” on the Saturday briefing.
Meanwhile, Japan’s Nikkei share average rose to a two-week closing high, propelled by gains in index heavyweight Fast Retailing, even as investors turned cautious as the earnings season kicked into high gear.
The Nikkei share average was up 0.57%, or 224.91 points, to close at 39,605.80, logging a 2.5% gain for the week, while the broader Topix was down 0.24%, or 6.47 points, to 2,706.20.
Shares of Fast Retailing jumped 6.1% to become the top percentage gainers, after the owner of clothing brand Uniqlo said on Thursday it had booked record profits for a third straight year.
Despite a dip in the Philadelphia SE Semiconductor index overnight and Wall Street’s three main indexes, Japan’s chip-related shares closed higher, tracking gains in Nvidia. Chip-testing equipment maker Advantest, which counts Nvidia among its customers, climbed 3.5%.
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The Nikkei struggled to move closer to the 40,000 level, with investors looking forward to a slew of corporate earnings results on Friday and Tuesday, and taking positions carefully ahead of a local holiday on Monday.
Elsewhere across the region, in earlier trade, Wellington, Bangkok, Taipei and Jakarta also edged up. However, Sydney, Seoul, Singapore, Mumbai and Manila dropped.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose a subdued 0.3% on Friday but was still set for a weekly loss of 1.7% after four straight weeks of gains.
European stock markets were set to open slightly higher, with Eurostoxx 50 futures and FTSE futures both up 0.2%. Wall Street futures were flat.
Tesla unveiled the long-awaited showcase of an autonomous taxi in Los Angeles, which came with fanfare but few details on timing. Production is not set to begin until 2026.
Overnight, data showed core US consumer inflation came in at 0.3% in September, slightly hotter than expected, pointing to stalling progress in the Federal Reserve’s fight against inflation.
However, high weekly jobless claims figures kept bets intact that the Fed is still on track to cut interest rates in November. Wall Street was slightly lower overnight.
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Oil, which gained more than 3% overnight, fell slightly at the end of the week, with Brent futures slipping 0.3% on Friday to $79.17 a barrel.
It was, however, still up 1.4% in the week thanks to a spike in US fuel use before Hurricane Milton and Middle East supply risks as investors brace for an Israeli response to an Iranian missile attack last week.
Treasuries rose on Friday, but are still set for weekly losses as traders pared expectations for outsized US rate cuts. Atlanta Fed Bank President Raphael Bostic on Thursday told the Wall Street Journal that he is open to a pause next month, although other officials supported more gradual rate cuts.
Two-year Treasury yields are up 4 basis points for the week to 3.9722%, while 10-year yields climbed 8 bps to 4.0669%.
Traders still price in an about 83% probability that the Fed will cut rates by 25 basis points next month and a 17% chance it would leave rates unchanged, according to CME’s FedWatch tool.
Currency market movements were subdued on Friday. The US dollar is set for the second straight week of gains, hovering near a two-month top against major peers.
The euro lost 0.4% this week to $1.0934, undermined by expectations that the European Central Bank is almost certain to lower rates in both October and December.
Gold was last up 0.6% at $2,644.69 an ounce, holding ground above the key $2,600 level.
Key figures
Tokyo – Nikkei 225 > UP 0.57% at 39,605.80 (close)
Hong Kong – Hang Seng Index <> CLOSED
Shanghai – Composite < DOWN 2.55% at 3,217.74 (close)
London – FTSE 100 < DOWN 0.13% at 8,226.81 (0941 BST)
New York – Dow < DOWN 0.14% at 42,454.12 (Thursday close)
- Reuters with additional editing by Sean O’Meara
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