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Asian stocks shrug off latest rout on Wall St as Chinese industrial activity weakens.
Asian stocks rose on Friday as investors shrugged off yet another decline on Wall Street, while an official survey showed a weakening in Chinese industrial activity.
Tokyo’s Nikkei 225 rose 1.2% to 38,119.96 as reports circulated about plans for major investments by government-backed pension funds and other large institutional investors.
Financial media outlet Nikkei said Japan is preparing to put nearly 100 trillion yen ($638 billion) more of public money into markets, following the example of the Government Pension Investment Fund.
Chinese stocks rose despite the search showing even more pressure on an economy already burdened by a prolonged crisis in the real estate sector. But negative indicators often fuel speculation that they will lead Beijing to counter growth-friendly policies.
Hong Kong’s Hang Seng index jumped 1.2% to 18,446.05 and the Shanghai Composite index rose 0.3% to 3,099.72.
Australia’s S&P/ASX 200 rose 0.5% to 7,668.90 and the Kospi in Seoul gained 0.4% to 2,646.44
Taiwan’s Taiex fell 0.9% as shares of the market’s biggest heavyweight, computer chipmaker Taiwan Semiconductor Manufacturing Corp., fell 2%, tracking declines in other major technology companies.
This followed Nvidia’s 3.8% drop on Thursday after massive gains driven by Wall Street’s frenzy around artificial intelligence technology.
Nvidia’s loss helped drag the Nasdaq index down 1.1%, while the S&P 500 fell 0.6%, although most stocks within the index and on Wall Street were higher. The Dow Jones Industrial Average fell 0.9%.
Friday will bring a monthly update on an inflation gauge the Federal Reserve prefers to use. The end of earnings reports is another market driver. Profits were largely better than expected for early 2024.
Helping to support the market on Thursday were better-than-expected earnings reports from a number of companies. Best Best Buy Predictions although its revenue fell short last quarter and its shares rose 13.4%. Foot Locker rose 15% after also reporting better-than-expected profit despite reporting sales below analyst forecasts.
Stocks also got a general boost as Treasury yields in the bond market eased, providing relief after rising earlier this week on concerns about weak demand for Treasury bonds following several U.S. government auctions. Higher yields put downward pressure on all types of investments.
Yields fell on Thursday after some reports showed that the US economy is not as strong as expected.
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A report showed more US workers have applied for unemployment benefits last week than expected, although the number of layoffs still remains low compared to history. Another suggested the overall growth of the US economy may not have been as strong as previously thought.
A slowdown in the economy could give the Federal Reserve more confidence that inflation is falling sustainably toward its 2% target. This, in turn, could convince you to reduce the federal funds ratewhich has been at the highest level for more than two decades.
The 10-year Treasury yield fell to 4.54% from 4.62% late Wednesday. The two-year yield, which more closely tracks expectations for Fed action, fell to 4.92% from 4.98%.
Among other gainers, C3.ai jumped 19.4% after the software company beat profit and revenue expectations in the latest quarter. HP gained 17% after beating previous earnings forecasts.
Many retailers are also releasing reports, as they do at the close of each earnings season, and scrutiny is heightened due to concerns about whether American families will be able to continue spending. Still high inflation is hurting them, especially those who have lower incomes.
In other trading Friday morning, benchmark U.S. crude oil lost 28 cents to $77.63 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil, the international standard, fell 21 cents to $81.67 per barrel.
The US dollar fell to 156.78 Japanese yen from 156.82 yen. The euro fell from $1.0834 to $1.0822.