Asian Equities on Course for Second Week of Gains: Markets Wrap

A gauge of Asian shares headed for a second weekly gain, hot on the heels of the S&P 500 entering a bull market, and as Chinese price data increased pressure for a rate cut from the central bank.

(Bloomberg) — A gauge of Asian shares headed for a second weekly gain, hot on the heels of the S&P 500 entering a bull market, and as Chinese price data increased pressure for a rate cut from the central bank.

The biggest advance was seen in Japanese stocks, which snapped a two-day decline, while those in Australia rose for the first time in four days. South Korean equities climbed to levels last seen a year ago. 

A small gain for Hong Kong’s Hang Seng Index pushed the benchmark toward the highest close in more than two weeks while mainland China stocks traded in tight ranges.

Chinese stocks have lagged their Asian and US peers this year amid disappointment over the weakness of the nation’s economic recovery from the pandemic and persistent geopolitical tension with the US. Data Friday showing a decline in producer prices and tepid consumer-price inflation bolstered speculation the government will have to do more to support the economy. 

“You need to see a much higher growth rate in China versus the US in order to justify moving back into China given the geopolitical risks and the lack of policy stimulus,” Thomas Taw, head of Asia Pacific iShares investment strategy at BlackRock, said in an interview with Bloomberg Television.

US stock futures inched lower in Asia while contracts for Europe rose slightly. Treasuries were little changed after rising on Thursday. Government bonds gained in Australia and New Zealand.

A jump in US jobless claims to the highest since October 2021 suggests the labor market is starting to cool, which helped to fuel tech stocks. They had faced headwinds from speculation of the Federal Reserve keeping interest rates higher for longer. 

The S&P 500 added 0.6% and the tech-heavy Nasdaq 100 rose 1.3% on Thursday with chipmakers including Nvidia Corp. and Advanced Micro Devices Inc. among the biggest gainers amid the frenzy in stocks linked to artificial intelligence. 

Weaker yen and yuan

Elsewhere in markets, the yen weakened after a rally Thursday when data showed Japan’s economy grew faster than expected in the first quarter. The offshore yuan fell following China’s inflation  data.

The Bloomberg Commodity Index fell slightly while it headed for its first weekly advance since April. Gains in gold and iron ore over the period helped offset a second weekly slide in oil, which shrugged off Saudi Arabia’s pledge to cut output.

The Turkish lira weakened after the country’s President Recep Tayyip Erdogan named Hafize Gaye Erkan, a former executive of Goldman Sachs Group Inc. and First Republic Bank as the new central bank governor. There are indications the new economic team is abandoning a costly intervention strategy as part of an expected turn toward more conventional policies.

Stocks

  • S&P 500 futures fell 0.1% as of 6:33 a.m. London time. The S&P 500 rose 0.6%
  • Nasdaq 100 futures were little changed. The Nasdaq 100 rose 1.3%
  • Japan’s Topix rose 1.4%
  • Australia’s S&P/ASX 200 rose 0.4%
  • Hong Kong’s Hang Seng rose 0.4%
  • The Shanghai Composite was little changed
  • Euro Stoxx 50 futures rose 0.1%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.0784
  • The Japanese yen fell 0.2% to 139.15 per dollar
  • The offshore yuan was little changed at 7.1232 per dollar
  • The Australian dollar was little changed at $0.6710

Cryptocurrencies

  • Bitcoin fell 0.2% to $26,595.65
  • Ether fell 0.3% to $1,848.6

Bonds

  • The yield on 10-year Treasuries advanced one basis point to 3.73%
  • Japan’s 10-year yield was little changed at 0.430%
  • Australia’s 10-year yield declined six basis points to 3.95%

Commodities

  • West Texas Intermediate crude fell 0.4% to $70.99 a barrel
  • Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Carly Wanna, Isabelle Lee and Rob Verdonck.

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