Asian shares continued their recovery on Friday as a tech-fuelled US rally, sparked by strong US retail data, lifted the mood on the region’s trading floors.
Japan’s benchmark Nikkei was poised for its best week in more than four years as upbeat risk sentiment spilled over from Wall Street.
Last week’s market turmoil was largely forgotten after a raft of US economic data allayed recession fears in the world’s largest economy and pushed back expectations for aggressive US rate cuts.
Leading the way was Tokyo’s Nikkei which climbed more than 3% and has risen nearly 8% this week, its best performance since early April 2020, buoyed by easing concerns about the state of the US economy, a pause in the yen’s rapid appreciation and a pick-up in Japan’s economic growth.
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The Nikkei share average jumped 3.64%, or 1,336.03 points, to close at 38,062.67, while the broader Topix was ahead 2.99%, or 77.85 points, to 2,678.60.
Wall Street’s main indexes closed higher on Thursday after US retail sales increased 1% in July following a downwardly revised 0.2% drop in June.
The Philadelphia SE Semiconductor index finished nearly 5% higher, providing fresh momentum to Japan’s big name chip-related shares. Tokyo Electron gained 3.8% and Advantest added 5.4%.
Meanwhile, the yen weakened against the dollar overnight in a boost to Japan’s export-related shares like automaker Toyota Motor, which rose about 2%.
The Nikkei fell more than 12% on August 5 in its biggest single-day decline since Black Monday. It has since clawed back those losses but remains well off an all-time peak of 42,426.77 touched in mid-July.
Tech shares drove Hong Kong stocks higher, after earnings releases by e-commerce giants helped lift sentiment, while China stocks were roughly flat.
China’s e-commerce giant JD.COM beat profit forecasts in the second quarter, while Alibaba Group Holding missed market expectations for first-quarter revenue.
The Hang Seng Tech Index added 2.1%, with JD and Alibaba shares up by 8.9% and 4.1%, respectively. The main Hang Seng Index gained 1.88%, or 321.02 points, to end at 17,430.16.
Antimony Producers’ Shares Gain
China’s blue-chip CSI300 Index was up 0.11%, while the Shanghai Composite Index edged up 0.07%, or 2.07 points, to 2,879.43. The Shenzhen Composite Index on China’s second exchange dipped 0.30%, or 4.62 points, to 1,548.93.
Share prices of Chinese antimony producers jumped by up to 10% following Beijing’s decision to limit exports of strategic mineral of which it is the dominant supplier.
China’s financial sector sub-index rose by 0.38%, while the consumer staples sector and the real estate index were down 0.31% and 0.45%, respectively.
Chinese H-shares listed in Hong Kong – stocks belonging to companies from the Chinese mainland – rose 1.91% to 6,150.41.
Elsewhere across the region, in earlier trade, stocks in Singapore, Seoul, Sydney, Taipei, Manila, Mumbai, Bangkok and Jakarta all posted healthy gains early.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1.3% and was set to rise more than 2% for the week.
S&P 500 futures rose 0.13%, while Nasdaq futures added 0.2%. Eurostoxx 50 futures gained 0.17%, though FTSE futures dipped 0.06%.
US Retail Sales Lift
Strong US retail sales data and low weekly jobless claims were the latest shot in the arm for the positive risk mood, following this week’s benign inflation report that re-affirmed bets for imminent Fed rate cuts, but likely at a measured pace.
Markets are now pricing in just a 25% chance of a 50-basis-point cut by the Federal Reserve next month, down from 55% a week ago, according to the CME FedWatch tool.
The Swiss franc, which also surged last week on the back of a flight to safety, was last at 0.8712 to the dollar and looked set to lose more than 0.6% for the week.
In other currencies, the euro struggled to break above the level of $1.10 against a firmer dollar, which was buoyed by elevated US Treasury yields.
The two-year yield hovered near its highest in more than a week, to last stand at 4.0749%, while the benchmark 10-year yield steadied at 3.9035%.
In commodities, oil prices edged lower on Friday, though set for a weekly gain, as the upbeat US data eased investor worries about a potential recession in the world’s top oil consumer.
Brent crude futures dipped 0.35% to $80.76 per barrel, while US West Texas Intermediate crude futures eased 0.5% to $77.78 a barrel. Still, the two were eyeing a weekly gain of more than 1% each.
Key figures
Tokyo – Nikkei 225 > UP 3.64% at 38,062.67 (close)
Hong Kong – Hang Seng Index > UP 1.88% at 17,430.16 (close)
Shanghai – Composite > UP 0.07% at 2,879.43 (close)
London – FTSE 100 < DOWN 0.28% at 8,324.22 (0835 BST)
New York – Dow > UP 1.39% at 40,563.06 (Thursday close)
- Reuters with additional editing by Sean O’Meara
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Japan’s Economy Grew 3.1% in 2nd Quarter on Consumption Rise
Hang Seng Dips Despite Stimulus Bets, Data Boost For Nikkei
