Asia’s major stock indexes were on the front foot on Thursday, lifted by optimism the US Fed’s interest rate campaign is coming to an end though more poor industrial data out of China dampened the mood.
Regional shares jumped to five-month highs amid hopes the US economy was heading for a soft landing, boosting the outlook for global growth after the US Federal Reserve delivered a quarter-point rate hike, as widely expected.
But gains were limited after it emerged China’s industrial profits extended this year’s double-digit pace of declines into a sixth month, as waning demand took a toll on companies’ profit margins.
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Japan’s Nikkei share average rose thanks to the positive sentiment but uncertainty around a closely watched Bank of Japan policy meeting limited gains.
Investors and analysts were split on the chances of a hawkish tweak to the BOJ’s yield curve control (YCC) policy at the end of a two-day meeting on Friday. And with the earnings rush picking up on Friday, investors also had more reason to be cautious.
Still, the regional rally helped the Nikkei finish 0.68% higher at 32,891.16. It rose to as high as 32,938.59, but failed to challenge the psychological 33,000 mark, a level not breached since July 6. The broader Topix ended 0.53% higher at 2,295.14.
Hong Kong shares rose, driven by a 4.9% surge in Chinese property stocks, as they extended a rebound from Monday when a top Politburo meeting fuelled hopes that more support to a battered sector is on the way.
The Hang Seng Index gained 1.41%, or 273.97 points, to 19,639.11.
Mainland China shares were roughly flat after that industrial profits slump, bolstering the case for more supportive policies to help the economy.
The Shanghai Composite Index lost 0.20%, or 6.36 points, to 3,216.67, while the Shenzhen Composite Index on China’s second exchange fell 0.48%, or 9.74 points, to 2,027.74.
Investors Wait on ECB, Bank of Japan
Elsewhere across the region, in earlier trade, Sydney, Seoul, Singapore, Taipei and Bangkok were up. But Mumbai and Jakarta dipped, while Manila and Wellington were barely moved.
MSCI’s index of Asia-Pacific shares outside Japan rose 0.62% and touched a more than five-month high at one point.
Investors are now waiting for European Central Bank later in the day, which is also seen approaching the end of its tightening campaign, and the Bank of Japan on Friday, which is expected to maintain the ultra loose monetary policy.
The upbeat mood is set to extend to Europe, with Eurostoxx 50 futures up 0.4% and FTSE futures rising 0.3%.
Nasdaq futures advanced 0.6%, helped by a 6.8% jump in Meta Platforms in after-hours trading. Facebook’s parent company reported a strong rise in advertising revenue, topping Wall Street targets.
On Wall Street, stocks ended little changed after the Fed hike, with the tech-heavy Nasdaq closing lower, dragged down by mostly technology stocks.
US Dollar Pressured in Asia
In the forex markets, the yen climbed to as high as 139.35 per dollar but last hovered near the 140 level. Overnight dollar/yen implied volatility jumped to 36.3%, the highest since March.
The US dollar continued to be pressured in Asia, off 0.3% against a basket of major currencies. Both the risk-sensitive Australian dollar and New Zealand dollar were up 0.8%.
Treasury yields were mostly steady on Thursday. The yield on 10-year Treasury notes held at 3.8610%, after a drop of 6 basis points overnight, while the rate-sensitive two-year was little changed at 4.8329%, having also eased 7 bps.
Elsewhere, oil prices were higher. Brent crude futures were up 0.9% at $83.69 per barrel and US West Texas Intermediate crude futures rose 1% to $79.59.
Gold prices edged up 0.2% to $1,976.18 per ounce.
Key figures
Tokyo – Nikkei 225 > UP 0.68% at 32,891.16 (close)
Hong Kong – Hang Seng Index > UP 1.41% at 19,639.11 (close)
Shanghai – Composite < DOWN 0.20% at 3,216.67 (close)
London – FTSE 100 > UP 0.32% at 7,701.69 (0933 GMT)
New York – Dow > UP 0.23% at 35,520.12 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
Read more:
US And EU Investors Avoid China, Opting for Emerging Markets
China Politburo Says Little on Solutions for Economic Woes
Hang Seng Falls on Stimulus Doubts, BoJ Caution Pulls on Nikkei
