By YURI KAGEYAMA – AP . Business Writer
TOKYO (AP) – Asian stocks rose mostly on Friday after a broad rally on Wall Street, but the main index in Hong Kong fell more than 2%.
Investors seem to have become more convinced that The Federal Reserve may ease Sharp interest rate increases are aimed at curbing inflation after the Commerce Department reported US economy shrinking at a rate of 0.9% annually in the most recent quarter. This followed a 1.6% year-over-year decline in the first quarter.
Investors have been cautiously eyeing regional tensions over China’s stance on Taiwan after President Zhou Biden and China, Xi Jinping Talk for more than two hours on Thursday. China left no doubt that it blamed the United States for the worsening relationship, but the White House said the point of the call was to “manage our differences responsibly and work together where our interests coincide.”
Hong Kong’s Hang Seng fell 2.3% to 20148.90 and the Shanghai Composite fell 0.7% to 3,258.86 after China’s leaders acknowledge that the economy is suffering It will not reach the official growth target of 5.5% this year.
The announcement came after a planning meeting of the ruling Communist Party on Thursday that Beijing will try to support sagging consumer demand but will stick to tough anti-COVID-19 tactics that have disrupted manufacturing and trade. highlights The high cost of the Xi government is willing to bear To stem the virus in a politically sensitive year as he is widely expected to try to extend his term in power.
Japan’s Nikkei 225 lost 0.3% to 27750.17, while Australia’s S&P/ASX 200 rose 0.8% to 6947.30. South Korea’s Kospi rose 0.4% to 2,446.22 points.
Japanese government data showed that factory production in June jumped 8.9% from the previous month, marking the first rise in three months. The last dilution of Pandemic lockdowns In China to promote Japanese production.
“On the economic data front, the easing of Chinese restrictions also resulted in stronger-than-expected June production for Japan, as the reopening of China is likely to have a positive impact across the region in the second half of the year,” Yip said. Jun Rong, Market Strategist at IG in Singapore.
The rise in the number of COVID-19 infections to record levels in many parts of Japan has raised alarm. But Robert Carnell, ING’s regional head of research for Asia Pacific, thinks Japan’s second-quarter gross domestic product, or gross domestic product, will rebound marginally from the first-quarter contraction.
On Thursday, the S&P 500 rose 1.2% to 4072.43, while the Dow Jones added 1% to close at 32,529.63. The Nasdaq rose 1.1% to 12162.59. The Russell 2000 Index rose 1.3% to 1873.03.
Consecutive quarters of lower GDP are an unofficial, if not definitive, indicator of what economists call a technical recession.
The GDP report indicated weakness across the economy. Consumer spending slowed as Americans bought fewer goods. Business investment declined. Inventories fell as companies slowed to restock shelves, lagging 2 percentage points of GDP.
The Federal Reserve has made a slowing US economy to tame the highest inflation in 40 years its goal by raising interest rates, most recently on Wednesday. The latest GDP report, combined with recent weak economic data, may give some investors confidence that the central bank will be able to cushion the scale of any further rate hike.
In a research note Thursday, Jonathan Golub, chief US equity strategist at Credit Suisse Securities, said, “Whether or not we are in a recession will be debated by academics in the coming months. However, today’s report unequivocally reflects significant weakness in activity.” economy, and increases the likelihood that the Fed will turn pacifist.”
The central bank raised its key short-term interest rate by 0.75 percentage points on Wednesday, taking it to the highest level since 2018. The move sparked a broad market recovery led by technology shares that helped give the Nasdaq its biggest gain in more than two years. . All major indexes are now on track for weekly gains, extending Wall Street’s strong rally in July.
In a week packed with corporate earnings reports, investors focused on what companies are saying about inflation and the impact of higher interest rates on their businesses and customers.
Technology stocks, retailers, restaurant chains and other companies that rely on direct consumer spending helped lift the S&P 500 index on Thursday. Microsoft shares rose 2.9 percent, Target added 3.1 percent, and McDonald’s rose 1.8 percent.
Telecom services stocks were the only lagging behind. Meta Platforms fell 5.2% after the social media giant said its revenue fell last quarter for the first time ever, weighed down by a drop in ad spend.
Shares of Spirit Airlines rose 5.6 percent after JetBlue It agreed to buy the low-cost airline for $3.8 billion Creation of the fifth largest airline in the country. The day before, Spirit’s attempt to merge with Frontier Airlines had collapsed. Frontier Airlines jumped 20.5%.
In energy trading, benchmark US crude rose 25 cents to $97.28 a barrel in electronic trading on the New York Mercantile Exchange. It lost 84 cents to $96.42 on Thursday.
Brent crude, the international pricing standard, rose 3 cents to $101.86 a barrel.
In currency trading, the US dollar fell to 133.24 Japanese yen from 134.27 yen late Thursday. The price of the euro came to $ 1.0220, a slight increase from $ 1.0199.
AP Business Contributing Writer Alex Veiga.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
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