Asia’s major stock indexes rallied on Thursday, buoyed by tech investment plans and hopes the US debt ceiling standoff may finally be coming to an end.
Investors across the region drew comfort from President Joe Biden and top US congressional Republican Kevin McCarthy underscoring their determination to reach an agreement soon by pledging to negotiate directly on a deal, amid estimates the Treasury could run out of money by the start of June.
Japan’s Nikkei share average rallied for a sixth straight session to scale a 20-month high, with traders cheered by its chipmaking firms and also upbeat April trade data.
The gains are the second such winning streak for the Nikkei in as many months as stocks surf a wave of buybacks and enthusiasm about governance reform. It has climbed nearly 17% this year, far outshining world stocks’ 8% rise.
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The Nikkei jumped 1.60% to close at 30,573.93, also posting its biggest daily gain since March 22. The broader Topix jumped 1.14% to 2,157.85, a 33-year high.
Japan’s exports rose 2.6% in April from a year earlier, Ministry of Finance data showed, just a little below expectations.
“Although exports have slowed from the previous month, this result was still relatively good compared to other Northeast Asian countries,” analysts at ING said in a note to clients.
And Japanese Prime Minister Fumio Kishida also said he expected chipmakers to invest in Japan after a meeting with industry executives, while Micron said it plans to spend up to 500 billion yen ($3.7 billion) to bring the latest ultraviolet chipmaking technology to Japan.
Chipmaking-equipment maker Tokyo Electron rose 5.45% and chip-testing equipment maker Advantest jumped 7.99%, providing the biggest boost to the Nikkei.
China stocks rebounded following two sessions of declines, as investors snapped up banking and artificial intelligence (AI) shares after data showed the country’s economic recovery was losing steam.
China Output Losing Steam
China’s April industrial output and retail sales growth undershot forecasts, suggesting the economic recovery is losing momentum. That prompted Nomura to cut its forecast for China’s 2023 gross domestic product (GDP) growth to 5.5% from 5.9% previously and expect China’s benchmark lending rates to be cut in June.
The Shanghai Composite Index rose 0.40%, or 13.09 points, to 3,297.32, while the Shenzhen Composite Index on China’s second exchange edged up 0.13%, or 2.72 points, to 2,028.68.
In Hong Kong, tech giants jumped 1.7%, with Alibaba up 3% ahead of its earnings results. The firm is expected to show a 3% rise in revenue.
Hong Kong’s benchmark Hang Seng Index gained 0.85%, or 166.68 points, to close at 19,727.25, while the Hang Seng China Enterprises Index advanced 1.19%.
Elsewhere across the region share indexes also rallied, following Wall Street’s lead, with gains in Sydney, Seoul, Singapore, Taipei, Manila, Taipei, Mumbai, Bangkok and Wellington.
MSCI’s broadest index of Asia-Pacific shares pushed 0.85% higher.
US Dollar at 5-Month High
Globally, futures pointed to gains of about 0.5% for the UK FTSE and German DAX at the open. The Wall Street rally looked to have run its course though, with US stock futures more or less flat.
Long-term US Treasury yields eased back slightly in Tokyo after rising to the highest since March 1 at 3.589% in New York.
The dollar pushed to a new two-week high at 137.745 yen, putting it 0.035 yen below its highest since March 8. It also ticked higher against the euro, inching back toward the six-week high of $1.08105 per euro reached overnight.
The greenback renewed a 22-week peak above 7 yuan in offshore trading after topping the closely watched level on Wednesday.
The Chinese currency, also known as the renminbi (RMB), is under pressure from a string of weak data that suggested Asia’s biggest economy may have already passed the peak of its post-Covid recovery.
Gold found its feet around $1,979 per ounce after dipping to a three-week low of $1,974.30 in the previous session.
Oil eased a little after Wednesday’s $2 rallies for both Brent and West Texas Intermediate (WTI) crude.
Key figures
Tokyo – Nikkei 225 > UP 1.60% at 30,573.93 (close)
Hong Kong – Hang Seng Index > UP 0.85% at 19,727.25 (close)
Shanghai – Composite > UP 0.40% at 3,297.32 (close)
London – FTSE 100 > UP 0.67% at 7,775.12 (0933 GMT)
New York – Dow > UP 1.24% at 33,420.77 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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