Asian stocks rose on Friday after US stocks rose on Thursday in the latest sharp turnaround on Wall Street following a better than expected report on unemployment eased concerns about the economic slowdown.
US futures and oil prices were little changed.
In Tokyo, the Nikkei 225 index closed 0.6% higher at 35,025.00. The yen erased earlier losses in morning trading and extended its fourth consecutive day of gains against the dollar, as Japanese stocks lost momentum as they often fall when the yen rises.
Earlier this week, weaker-than-expected employment data from the US raised concerns about a slowing economy, where the Federal Reserve has maintained high interest rates aimed at stifling inflation for too long. This triggered a sell-off in global markets, with the scale of the declines being amplified as investors unwound their yen carry trade positions.
In Friday trading, the US dollar fell to 147.16 Japanese yen from 147.28 yen. The euro cost US$1.0926, up from US$1.0918.
China’s inflation was higher than expected in July, with the consumer price index rising 0.5% compared to the same period last year, driven by food prices that no longer weigh on inflation and remained stable last month.
The Hang Seng in Hong Kong added 1.3% to 17,117.03 and the Shanghai Composite index fell 0.1% to 2,867.21.
In South Korea, the Kospi jumped 1.2% to end at 2,588.43, Australia’s S&OP/ASX 200 advanced 1.3% to 7,777.70.
Elsewhere, Taiwan’s Taiex rose 2.9%, with chipmaker Taiwan Semiconductor Manufacturing Co. gaining 4.2%, tracking a rise in Big Tech stocks on Wall Street. The SET in Bangkok rose 0.1%.
On Thursday, S.&P 500 jumped 2.3% to 5,319.31 for its best day since 2022 and erased almost 0.5% of its loss in what was a brutal start to the week. The Dow Jones Industrial Average rose 1.8% to 39,446.49 and the Nasdaq composite rose 2.9% to 16,660.02, with Nvidia and other Big Tech stocks helping lead the way.
Treasury yields also rose, signaling that investors are calmer about the economy after a report showed that fewer American workers filed for unemployment benefits last week. The number was better than economists expected.
So far, the S&OP 500 is still down almost 10% from its all-time high set last month. These crashes are regular occurrences on Wall Street, and 10% “corrections” happen roughly every year or two. After Thursday’s jump, the index is about 6% off its record high.
Still, market swings look more like a “positioning-driven crash” caused by too many investors piling into similar trades and then exiting them together, rather than the start of a long-term market decline caused by a recession, of according to strategists at BNP Paribas.
They say it’s more like the 2010 “flash crash” than the 2008 global financial crisis or the 2020 pandemic-driven recession.
Meanwhile, major U.S. companies continue to report earnings reports for the spring that are mostly better than analysts expected.
Eli Lilly jumped 9.5% to help lead the market after its delivery stronger profit and revenue than Wall Street had predicted. Sales of its diabetes treatment Mounjaro and its weight-loss counterpart Zepbound are growing, and the company raised its financial forecast for the year.
In the bond market, the 10-year Treasury yield rose to 3.99% from 3.95% late Wednesday.
In energy trading, benchmark U.S. crude rose 1 cent to $76.20 a barrel. Brent crude, the international standard, fell 7 cents to $79.09 a barrel.
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