Asian stocks edged ahead on Friday though gains were limited by ongoing growth fears and the death of Japan’s former prime minister Shinzo Abe who was shot and killed on the campaign trail.
The attack saw a pull-back in shares across the region but the Nikkei and Hang Seng managed to post small advances at the close while China’s markets were pushed back by worries over new Covid-19 flare-ups.
Tokyo’s Nikkei index shed most of its early gains to end flat after the shooting of Abe while campaigning for a parliamentary election.
The index closed up 0.1% at 26,517.19 after climbing as much as 1.4% earlier in the session. The broader Topix index also cut most of its gains to close 0.27% higher at 1,887.43. The Nikkei has gained 2.24% for the week and the Topix 2.3%.
“There must have been mixed reasons for the Nikkei cutting gains today but the accident [of Abe] was one of them, as I believe he still has influence on Japan’s economic and monetary policy,” Jun Morita, general manager of the research department at Chibagin Asset Management, said.
Abe, best known for his signature “Abenomics” policy that featured bold monetary easing and fiscal spending, was shot from behind by a man with a homemade gun and later died of his injuries.
“Abe’s [death] could affect the Bank of Japan’s ultra-loose monetary policy, which is not positive to the stock market,” Morita said.
MSCI’s broadest index of Asia-Pacific shares outside Japan was still up 0.3% on the day, but had retreated from the eight-day high hit earlier in the session.
Covid Threat Hits China Stocks
China stocks snapped a five-week rising streak, as worries over Covid-19 flare-ups and geopolitical tensions outweighed hopes for stimulus from Beijing. Hong Kong shares tracked overnight Wall Street gains.
Both China’s blue-chip CSI300 Index and the Shanghai Composite Index fell 0.3% at the close, reversing early gains, and posting their first weekly loss in six.
In Hong Kong, the benchmark Hang Seng Index rose 0.4%, but for the week as a whole the index lost 0.6%, while the Shenzhen Composite Index on China’s second exchange dropped 0.35%, or 7.76 points, to 2,219.90.
The market was not helped by signs of lingering Sino-US tensions. A senior Chinese military officer warned his US counterpart on Thursday that any “arbitrary provocations” would be met with a “firm counterstrike” by China.
Elsewhere across the region, South Korean shares were set for biggest weekly rise in five months, while Indonesian shares rose more than 1% and were set for their second straight weekly rise.
Shares in Manila surged more than 2% and were set for their first weekly gain in five and Indian stocks edging ahead with Mumbai’s signature Nifty 50 index up 0.17%, or 27.90 points, at 16,160.80.
Eyes on US Payroll Data
Globally, European shares opened slightly lower on Friday but struggled to make gains after the shooting of Japan’s former prime minister while investors waited for key US jobs data later in the session.
At 0751 GMT, the MSCI world equity index, which tracks shares in 50 countries, was down 0.1% on the day but set for a 1.4% weekly gain overall.
The latest indicator of the health of the US economy is due later in the day with the release of US non-farm payrolls data. The consensus expectation is for 268,000 jobs to have been added in May.
“Employment matters because job security underpins the economic recovery,” Paul Donovan, chief economist of UBS Global Wealth Management, wrote in a note to clients.
The dollar index rose ahead of the data, up 0.6% on the day at its highest since 2002.
Oil prices were down, with Brent crude futures and US West Texas Intermediate crude set for a weekly loss.
Tokyo – Nikkei 225 > UP 0.10% at 26,517.19 (close)
Hong Kong – Hang Seng Index > UP 0.38% at 21,725.78 (close)
Shanghai – Composite < DOWN 0.25% at 3,356.08 (close)
New York – Dow > UP 1.12% at 31,384.55 (Thursday close)
- Reuters with additional editing by Sean O’Meara