Most Asian stocks rose on Friday, buoyed by a rebound in technology shares from bruising losses over the past week, while markets showed limited reaction to an in-line rate hike by the Bank of Japan.
Japanese markets slightly trimmed their gains after the BOJ’s decision, but continued to outpace their regional peers for the day. But the Nikkei 225, along with most major Asian bourses, was nursing steep losses for the week.
Regional markets took positive cues from Wall Street, which rose overnight on a rebound in tech shares, especially as softer-than-expected consumer price index inflation data for November drummed up optimism over more rate cuts by the Federal Reserve.
S&P 500 Futures rose less than 0.1% by 23:14 ET (04:14 GMT), as analysts said that December’s CPI reading was likely to have a greater bearing on interest rate expectations.
Get more top Asian stock picks and other insights by upgrading to InvestingPro - get 55% off today.
Japan’s Nikkei 225 upbeat after BOJ hike; Ueda address awaited
Japan’s Nikkei 225 index rose 1%, slightly trimming gains but still leading gains across Asian markets, while the broader TOPIX index added 0.9%.
Local markets benefited from a rebound in tech shares, while also seeing some bargain buying after logging deep losses over the past week. The Nikkei was nursing a 2.6% decline this week.
The BOJ raised interest rates by 25 basis points as expected, and said it had room to hike rates further if the economy and inflation picked up in line with its forecasts.
The hike was widely expected by markets, given that Japanese inflation steadily increased this year, while the yen wallowed near multi-year lows.
CPI data released earlier on Friday showed inflation remained sticky and above the BOJ’s 2% annual target in November, reinforcing bets on a hike.
Beyond the hike, markets will be closely watching for any hawkish commentary from Governor Kazuo Ueda, who is set to speak at a press conference scheduled for 01:30 ET (06:30 GMT).
Asia stocks rise on tech rebound, but still set for weekly losses
Broader Asian markets advanced on Friday, benefiting from a recovery in heavyweight tech shares as investors bought back into the battered sector.
Optimism over more U.S. interest rate cuts also boosted sentiment after Thursday’s soft CPI data. But analysts warned that the reading was likely to have been disrupted by a prolonged government shutdown in October and early-November, and that December’s CPI print will provide more definitive cues on inflation.
South Korea’s KOSPI added 0.8% on Friday, but was the worst performer in Asia this week, down nearly 4% on a wipeout in tech valuations.
Hong Kong’s Hang Seng rose 0.6% and was down 1.5% this week.
Indexes with relatively smaller tech valuations clocked smaller losses this week. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.6% apiece on Friday, and traded flat for the week.
Australia’s ASX 200 rose 0.5% and was trading mildly lower for the week, while Singapore’s Straits Times index was flat.
India’s Nifty 50 index rose 0.5% in morning trade, but was trading down 0.9% this week amid renewed concerns over slowing growth in the Indian economy.
Source: Investing