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Asian Stocks Lifted by Stimulus, Easing US-China Tensions

But confidence on trading floors still remains thin over soaring prices, tighter monetary policy, China’s Covid lockdowns and war in Ukraine


Asian stocks rebounded on Friday following in the slipstream of a strong Wall Street rally with Hong Kong’s tech giants leading the charge.
A market index board outside the Indonesia Stock Exchange in Jakarta. Photo: Reuters.

 

Asian stocks rebounded on Friday following in the slipstream of a strong Wall Street rally with Hong Kong’s tech giants leading the charge.

Forecast-beating earnings from Alibaba and Baidu sent their shares soaring and Asian shares also benefited from more Chinese government stimulus, signs the US central bank could take a breather in hiking interest rates and hopes of stabilising Sino-US ties.

The United States will not block China from growing its economy, but wants it to adhere to international rules, Secretary of State Antony Blinken said in a speech on US strategy toward China.

“We are not looking for conflict or a new Cold War. To the contrary, we’re determined to avoid both,” he said.

 

Also on AF: US Sanctions China Traders Accused of Funnelling Oil Revenue to Iran

 

The Hang Seng Index rose 2.89%, or 581.16 points, to 20,697.36. The Shanghai Composite Index edged up 0.23%, or 7.13 points, to 3,130.24, while the Shenzhen Composite Index on China’s second exchange was flat, inching down 0.10 points to 1,955.03.

Both China’s blue chip CSI300 index and the Shanghai Composite Index rose 0.2%. But for the week, CSI300 lost 1.9%, while the Shanghai index fell 0.5%.

Profits at China’s industrial firms fell at their fastest pace in two years in April, data showed, but investors expect more market-friendly policies ahead, after Premier Li Keqiang vowed to ensure reasonable growth in the second quarter.

Tokyo shares closed higher on Friday, supported by gains of chip-related stocks and improving investor sentiment following Wall Street rallies. The benchmark Nikkei 225 index climbed 0.66%, or 176.84 points, to end at 26,781.68, while the broader Topix index rose 0.52%, or 9.72 points, to 1,887.30.

Indian stocks advanced with Mumbai’s signature Nifty 50 index up 1.13%, or 182.30 points, to close at 16,352.45.

Seoul, Sydney, Singapore, Taipei, Manila, Jakarta and Bangkok were also well up. London was dipped in early trade, while Paris and Frankfurt edged up.

 

Fed Set to Halt Rates Push

Global stocks were heading for their first weekly gain in eight weeks on a more upbeat earnings view while the dollar hit one-month lows after the Federal Reserve’s minutes suggested it could put the brakes on rapid rate hikes later this year.

Optimistic US earnings outlooks overnight from department store operator Macy’s Inc and discount chains Dollar General Corp and Dollar Tree boosted stocks.

The Fed’s minutes of its May meeting released on Wednesday confirmed two more 50-basis-point hikes each in June and July, but policymakers also suggested the potential for a pause later in the year.

The MSCI world equities index rose 0.38%. It was heading for a 3.2% rise on the week and an almost 6% recovery from 18-month lows set two weeks ago.

S&P futures were flat after the Dow Jones Industrial Average rose 1.61%, the S&P 500 gained 1.99%, and the Nasdaq Composite jumped 2.68% on Thursday.

The swing in sentiment drove the dollar to one-month lows against an index of currencies, down 3.2% from 20-year highs hit earlier this month.

Oil prices stayed near a two-month high, with Brent crude on track for its biggest weekly jump in six weeks, supported by the prospect of an EU ban on Russian oil and the upcoming US summer driving season.

 

Key figures at around 0810 GMT

Tokyo – Nikkei 225 > UP 0.7% at 26,7781.68 (close)

Hong Kong – Hang Seng Index > UP 2.9% at 20,697.36 (close)

Shanghai – Composite > UP 0.2%at 3,130.24 (close)

London – FTSE 100 > DOWN 0.1% at 7,558.09

Brent North Sea crude > UP 0.2% at $117.67 per barrel

West Texas Intermediate > UP 0.1% at $114.19 per barrel

New York – Dow > UP 1.6% at 32,637.19 (close)

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

Alibaba Soars 12% as Chinese Tech Stocks Surge

Weak China Demand Puts Global Companies in a Quandary

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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