Asian stocks saw an increase on Friday following a rally in U.S. stocks on Thursday, as a positive report on unemployment eased concerns about the slowing economy. Read more
U.S. futures and oil prices also experienced a rise.
In Tokyo, the Nikkei 225 index rose by 1.6% to reach 35,380.23. The yen faced pressure after appreciating in value against the dollar for three consecutive days, boosting Japanese stocks that tend to rise when the yen falls.
Earlier in the week, disappointing employment data from the U.S. raised concerns about a sluggish economy where the Federal Reserve has maintained high interest rates to curb inflation for too long. This prompted a sell-off in global markets, with investors unwinding their yen carry trade positions.
At the start of trading on Friday, the U.S. dollar was at 147.15 Japanese yen, up from 147.24 yen. The euro was priced at $1.0924, an increase from $1.0918.
China experienced higher-than-expected inflation in July, with the consumer price index rising by 0.5% compared to the same period last year, boosted by stable food prices that did not weigh down inflation and remained unchanged from the previous month.
The Hang Seng in Hong Kong rose by 1.9% to 17,211.26, while the Shanghai Composite index increased by 0.2% to 2,876.51.
In South Korea, the Kospi surged by 1.5% to 2,595.50, and Australia’s S&P/ASX 200 advanced by 1.4% to 7,792.80.
Elsewhere, Taiwan’s Taiex saw a 3.4% increase, with chip maker Taiwan Semiconductor Manufacturing Co. gaining 3.6%, mirroring the rally of Big Tech stocks on Wall Street. The SET in Bangkok was up by 0.5%.
On Thursday, the S&P 500 recorded a 2.3% jump to reach 5,319.31, marking its best day since 2022 and recovering almost all of its losses from the challenging start of the week. The Dow Jones Industrial Average increased by 1.8% to 39,446.49, and the Nasdaq composite climbed by 2.9% to 16,660.02, with Nvidia and other Big Tech stocks leading the way.
Treasury yields also rose, indicating improved investor confidence in the economy after a report showed a decrease in the number of U.S. workers applying for unemployment benefits last week, surpassing economists’ expectations.
The S&P 500 is currently down by around 10% from its all-time high set last month. Market corrections of around 10% tend to occur on Wall Street roughly every year or two. Following Thursday’s increase, the index is now within approximately 6% of its record.
Despite the market’s volatility, it appears to be more of a “positioning-driven crash” resulting from many investors engaging in similar trades and exiting them simultaneously, rather than the beginning of a long-term market decline caused by a recession, according to BNP Paribas strategists.
They suggest that the situation resembles the “flash crash” of 2010 rather than the global financial crisis of 2008 or the recession triggered by the pandemic in 2020.
Meanwhile, major U.S. companies are continuing to report stronger-than-expected profit for the spring season.
Eli Lilly saw a 9.5% increase, driving market growth after exceeding Wall Street’s forecasts for profit and revenue. Sales of its Mounjaro diabetes treatment and Zepbound weight-loss counterpart are thriving, prompting the company to raise its financial outlook for the year.
In the bond market, the yield on the 10-year Treasury rose to 3.99% from 3.95% late Wednesday.
In energy trading, benchmark U.S. crude oil increased by 16 cents to $76.35 a barrel, while Brent crude, the international standard, rose by 10 cents to $79.36 a barrel.
AP Business Writers Stan Choe contributed.
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