Asian stock markets are trading mostly higher on Friday, following the broadly positive cues from global markets overnight, as trader sentiment remains positive on hopes the U.S. Fed will slow down its pace of interest rate hikes at its upcoming meetings. However, the unexpected decline in US GDP for the second consecutive quarter signals the U.S. economy is in a technical recession. Asian markets ended mostly higher on Thursday.
Economists cast doubt on whether the economy is actually in a recession, citing other indicators indicating continued growth and persistent strength in the labor market.
The contraction in U.S. GDP growth in the latest quarter raised expectations the Fed might raise rates by not more than 50 basis points at its next meeting.
The Australian stock market is significantly higher on Friday, extending the gains in the previous three sessions, with the benchmark S&P/ASX 200 moving above the 6,900 level, following the broadly positive cues from global markets overnight, with gains across most sectors, particularly resources, energy and technology stocks.
The benchmark S&P/ASX 200 Index is gaining 67.60 points or 0.98 percent to 6,957.30, after touching a high of 6,973.60 earlier. The broader All Ordinaries Index is up 68.80 points or 0.97 percent to 7,184.70. Australian markets ended significantly higher on Thursday.
Among major miners, Rio Tinto and OZ Minerals are gaining more than 1 percent each, while BHP Group is adding more than 2 percent, Mineral Resources is advancing almost 5 percent and Fortescue Metals is flat.
Oil stocks are higher. Origin Energy is gaining almost 2 percent and Santos is advancing more than 2 percent, while Beach energy and Woodside Energy are adding more than 1 percent each.
Among tech stocks, WiseTech Global and Xero are gaining almost 2 percent each, while Afterpay owner Block is adding almost 3 percent. Appen is flat and Zip is plunging more than 10 percent.
Among the big four banks, National Australia Bank, Commonwealth Bank and Westpac are gaining almost 1 percent each, while ANZ Banking is edging up 0.5 percent.
Gold miners are higher. Northern Star Resources and Gold Road Resources are gaining more than 2 percent each, while Newcrest Mining is adding more than 1 percent, Resolute Mining is up almost 2 percent and Evolution Mining is advancing almost 3 percent.
In economic news, private sector credit in Australia was up 0.9 percent on month in June, the Reserve Bank of Australia said on Friday – unchanged from the previous month following an upward revision from 0.8 percent. On a yearly basis, private sector credit was up 9.1 percent – up from 9.0 percent in the previous month.
In the currency market, the Aussie dollar is trading at $0.700 on Friday.
The Japanese stock market is modestly higher on Friday, extending the gains in the previous two sessions, with the benchmark Nikkei 225 moving above the 27,900 level, following the broadly positive cues from global markets overnight, as traders digest a slew of domestic economic data.
The benchmark Nikkei 225 Index closed the morning session at 27,944.55, up 129.07 points or 0.46 percent, after touching a high of 28,001.80 earlier. Japanese shares closed modestly higher on Thursday.
Market heavyweight SoftBank Group is edging up 0.4 percent and Uniqlo operator Fast Retailing is gaining more than 1 percent. Among automakers, Honda is losing more than 1 percent, while Toyota is edging up 0.5 percent.
In the tech space, Advantest is surging almost 5 percent and Tokyo Electron is edging up 0.2 percent, while Screen Holdings is losing almost 1 percent.
In the banking sector, Mitsubishi UFJ Financial is edging up 0.2 percent, while Sumitomo Mitsui Financial and Mizuho Financial are flat.
Among major exporters, Canon is edging up 0.1 percent, Mitsubishi Electric is gaining almost 1 percent and Sony is adding more than 1 percent, while Panasonic is losing 1.5 percent.
Among the other major gainers, M3 and Fuji Electric is gaining more than 4 percent each, while CyberAgent and Rakuten Group are adding more than 3 percent each. Z Holdings is up almost 3 percent.
Conversely, JGC Holdings, NEC is plunging almost 7 percent, Hino Motors is losing almost 4 percent and Hitachi Construction Machinery is declining more than 4 percent, while Astellas Pharma and Nissan Motor are down almost 4 percent each. Murata Manufacturing and Mitsubishi Motors are sliding more than 3 percent each.
In economic news, the jobless rate in Japan came in at a seasonally adjusted 2.6 percent in June, the Ministry of Internal Affairs and Communications (MIAC) said on Friday. That missed expectations for 2.5 percent, although it was unchanged from the May reading. The jobs-to-applicant ratio improved to 1.27 – beating forecasts for 1.25 and up from 1.24 in the previous month. The participation rate was 63.0 percent – also beating forecasts for 62.9 percent and up from 62.7 a month earlier.
The MIAC also said overall consumer prices in the Tokyo region of Japan were up 2.5 percent on year in July. That exceeded expectations for an increase of 2.4 percent and was up from 2.3 percent in June. Core CPI, which excludes volatile food prices, climbed an annual 2.3 percent – topping forecasts for 2.2 percent and accelerating from 2.1 percent in the previous month.
Meanwhile, industrial production in Japan was up a seasonally adjusted 8.9 percent on month in June, the Ministry of Economy, Trade and Industry said on Friday. That beat forecasts for an increase of 3.7 percent following the 7.5 percent contraction in May. On a yearly basis, industrial output fell 3.1 percent – unchanged from the May reading but missing forecast for a decline of 2.0 percent. Upon the release of the data, the METI changed its assessment of industrial production to: fluctuating indecisively. According to the METI’s forecast of industrial production, output is expected to rise 3.8 percent in July and 6.0 percent in August.
The METI also said the value of retail sales in June was down a seasonally adjusted 1.4 percent on month in June, the Ministry of Economy, Trade and Industry said on Friday. That missed forecasts for a decline of 0.5 percent following the upwardly revised 0.7 percent increase in May (originally 0.6 percent). On a yearly basis, retail sales improved 1.5 percent – again shy of expectations for an increase of 2.8 percent following the upwardly revised 3.7 percent jump in the previous month (originally 3.6 percent).
In the currency market, the U.S. dollar is trading in the lower 134 yen-range on Friday.
Elsewhere in Asia, New Zealand, Malaysia, South Korea, Taiwan and Indonesia are higher by between 0.4 and 0.9 percent each. Hong Kong is down 1.4 percent, while China and Singapore are down 0.5 and 0.2 percent, respectively.
On Wall Street, stocks showed a substantial turnaround over the course of the trading session on Thursday, recovering from an early move to the downside to end the day sharply higher. The major averages added to the strong gains posted on Wednesday to reach their best closing levels in well over a month.
The major averages pulled back off their highs of the session going into the close but remained firmly positive. The Dow jumped 332.04 points or 1 percent to 32,529.63, the Nasdaq shot up 130.17 points or 1.1 percent to 12,162.59 and the S&P 500 surged 48.82 points or 1.2 percent to 4,072.43.
The major European markets also moved to the upside over the course of the session. While the U.K.’s FTSE 100 Index closed just below the unchanged line, the German DAX Index advanced by 0.9 percent and the French CAC 40 Index jumped by 1.3 percent.
Crude oil futures settled lower on Thursday as worries about the outlook for energy demand due to slowing global economic growth weighed on prices. West Texas Intermediate Crude oil futures for September ended lower by $0.84 or 0.9 percent at $96.42 a barrel.
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