Asian stocks made steady progress on Friday, with investors still in positive mood after the US Fed weighed in with a hefty interest rate cut this week.
Traders are wagering on continued US economic growth, and better-than-expected jobless claims data added to the view that the labour market there remains healthy.
Benefiting from the optimistic mood, Japan’s Nikkei share average rose as it logged its best week since mid-August, though the gains were capped as the yen strengthened after the Bank of Japan set the stage for future interest rate hikes.
Data released on Friday showed Japan’s core inflation accelerated for a fourth consecutive month, reinforcing the case for further policy tightening.
Investors were also cautious ahead of a long weekend, with Japan shut for a national holiday on Monday.
Also on AF: Green Investment Hindered by Poor Demand For Low-Carbon Products
The tech-heavy Nikkei ended the day up 1.53% at 37,723.91, with chip-sector stocks rallying in line with their US peers. The index advanced 1.57% for the week. The broader Topix index advanced 0.97%, or 25.48 points, to 2,642.35.
Shares of chip-making equipment giant Tokyo Electron soared 5.32%, putting it among the Nikkei’s top 5 percentage gainers.
China’s stock market was subdued as benchmark lending rates remained unchanged, contrary to expectations. Despite this, its major indices are poised for their first weekly gains in a month, driven by the US Federal Reserve’s substantial rate cut on Wednesday.
China’s blue-chip CSI300 index was up 0.16%, while the Shanghai Composite Index edged up 0.03%, or 0.79 points, to 2,736.81 But the Shenzhen Composite Index on China’s second exchange dipped 0.16%, or 2.34 points, to 1,494.66.
In Hong Kong, the Hang Seng Index gained 1.36%, or 245.41 points, to close at 18,258.57, marking its best weekly performance in five months amid a broad rally in global markets.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Taipei, Mumbai, Bangkok and Manila also saw strong buying, but Wellington, Singapore and Jakarta fell.
Gold Near Record Highs
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6% to the highest in two months, tracking overnight gains on Wall Street. The index was headed for a weekly gain of 2.4%.
European sharemarkets were, however, set for a lower open, with Eurostoxx 50 futures slipping 0.3% and FTSE futures falling 0.5%. Wall Street futures were also slightly lower, after the S&P 500 surged to a record close on Thursday.
Overnight, Wall Street finally had the time to digest the Federal Reserve’s first rate cut. With more easing to come, investors are wagering on continued US economic growth and better-than-expected jobless claims data added to the view that the labour market remained healthy.
Markets imply a 40% chance the Fed will cut by another 50 basis points in November and have 73 basis points priced in by year-end. Rates are seen at 2.85% by the end of 2025, which is now thought to be the Fed’s estimate of neutral.
In foreign exchange markets, the dollar was pinned near one-year lows against major currencies. The British pound was buoyant at $1.3297, having rallied 0.7% overnight to the highest since March 2022 as the Bank of England held rates steady.
Short-dated US Treasuries held close to two-year highs. Two-year Treasury yields slipped 3 basis points to 3.57% on Friday but were up 3 bps for the week.
Commodities also held onto their weekly gains. Gold hovered near a record high at $2,592.67 an ounce and oil prices are set for their second straight week of gain. Brent futures slipped 0.3% to $74.67 a barrel, but are still up 4.2% this week.
Key figures
Tokyo – Nikkei 225 > UP 1.53% at 37,723.91 (close)
Hong Kong – Hang Seng Index > UP 1.36% at 18,258.57 (close)
Shanghai – Composite > UP 0.03% at 2,736.81 (close)
London – FTSE 100 < DOWN 0.56% at 8,282.38 (0935 BST)
New York – Dow > UP 1.26% at 42,025.19 (Thursday close)
- Reuters with additional editing by Sean O’Meara
Read more:
Nikkei, Hang Seng, China Stocks Advance on US Rate Cut Boost
Rising India Overtakes China in Key MSCI Equities Index
Stocks Cheer China Chipmaking ‘Breakthrough’ But Experts in Doubt
Nikkei Rebounds as Yen Slides, China Stocks U-Turn on Rate Bets
