Investing.com-- Asian stocks saw a rise on Friday as concerns of a U.S. recession diminished, while positive inflation data from China also boosted sentiment.
Although regional markets were still on track for weekly losses after experiencing significant declines earlier in the week, Asian stocks took a positive cue from Wall Street. Better-than-expected jobless claims data fueled optimism that the U.S. labor market might not be as dire as initially feared. U.S. stock index futures also saw a slight increase in Asian trade.
Chinese Markets Lag, But CPI Data Shows Positivity
China’s Shanghai and Shenzhen indexes rose by 0.3% each, slightly less than their Asian counterparts. Both indexes were down by about 0.8% for the week, marking a third consecutive week of losses. However, the inflation data from China displayed some encouraging trends. Consumer price index (CPI) picked up more than anticipated, while producer price index (PPI) saw a slower decline than expected. This suggests that the series of interest rate cuts by the People’s Bank of China might be yielding some results, although the sustainability of reversing China’s deflationary trend remains to be seen.
Recent weak economic readings from China have led to a souring sentiment towards Chinese markets, with the benchmark indexes hovering near six-month lows.
Japanese Stocks Surge, Partially Recovering Weekly Losses
Japanese Nikkei and Topix indexes surged by 2% and 1.5% respectively on Friday. Despite being on track to lose around 1.5% for the week, they managed to recover a significant portion of their earlier losses. The rebound in Japanese markets was supported by efforts from Bank of Japan officials to downplay the central bank’s unexpectedly hawkish messaging from the previous week. Bargain hunting in heavyweight tech stocks and positive earnings reports from major companies like Tokyo Electron also contributed to the rise in Japanese indexes.
Overall, broader Asian stocks advanced, with tech-heavy markets such as South Korea’s Kospi and Hong Kong’s Hang Seng index showing gains of 1.5% to 2%. The tech sector benefited from a rebound in U.S. markets. Australia’s ASX 200 rose by 1.4% on Friday, managing to recoup a significant portion of its losses for the week.
Futures for India’s Nifty index indicated a slightly positive opening, following a decline on Thursday after the Reserve Bank of India took an unexpectedly hawkish stance and slightly downgraded its growth outlook for the current quarter.
Analysis:
In summary, Asian stocks saw a positive trend on Friday, with fears of a U.S. recession easing and positive inflation data from China providing a boost. While Chinese markets lagged behind, the improving CPI and PPI figures suggest some positive developments. Japanese markets surged, partially recovering from earlier losses, with tech stocks and positive earnings contributing to the rise. Overall, the rebound in Asian markets, particularly in tech-heavy sectors, was supported by a positive sentiment from Wall Street and a general recovery in global markets.