Asian Shares Mixed On Chinese Growth Concerns
Asian stocks ended mixed on Friday, as hopes that lawmakers in Washington will avert a first-ever U.S. default offset worries about China’s uneven economic recovery.
U.S. President Joe Biden and House Speaker Kevin McCarthy hope to finalize a deal on the debt ceiling after Biden returns from the Group of Seven meeting in Japan on Sunday.
U.S. Treasury Secretary Janet Yellen told top bank executives that a failure to raise the debt ceiling would be “catastrophic” for the financial system.
Treasury yields climbed and the dollar held near a two-month high on hawkish Fed bets. Gold inched up but was on course for its biggest weekly drop in 3-1/2 months as investors awaited Fed Chair Jerome Powell’s remarks later in the day to gauge the monetary policy path. Oil rebounded from losses of more than 1 percent in the previous session.
Chinese shares ended lower as weak economic data released earlier this week reignited concerns about a patchy recovery in the world’s biggest crude importer.
The benchmark Shanghai Composite Index dropped 0.4 percent to 3,283.54, while Hong Kong’s Hang Seng Index tumbled 1.4 percent to 19,450.57. Alibaba Group Holding plunged over 6 percent after reporting a lower-than-expected 2 percent increase in quarterly revenue.
Japanese stocks extended gains, with the Nikkei 225 Index climbing 0.8 percent to 30,808.35, marking its highest level in nearly 33 years on the back of strong domestic earnings and increased investment by Warrant Buffett in local stocks. The broader Topix ended 0.2 percent higher at 2,161.69.
The yen rose slightly against the greenback after data showed Japanese inflation re-accelerated in April after cooling earlier in the year.
Seoul stocks rose for a fifth consecutive session as investors cheered signs the Biden administration is making progress on debt ceiling talks with Congress. The Kospi rallied 0.9 percent to 2,537.79.
Market behemoth Samsung Electronics jumped 3.3 percent and No. 2 chipmaker SK Hynix surged 4 percent, while leading refiner SK Innovation fell 2.6 percent.
Australian markets rose, led by banks and tech stocks. The benchmark S&P/ASX 200 Index gained 0.6 percent to close at 7,279.50, while the broader All Ordinaries Index settled 0.6 percent higher at 7,471.50.
BrainChip Holdings and Xero spiked 9.3 percent and 5.4 percent, respectively in the tech sector. Tysers parent AUB Group surged 5.9 percent after completing a capital raising.
Qantas Airways rose 1.1 percent after the airline said it expects its international capacity to reach pre-COVID levels by March 2024.
Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index jumped 1.0 percent to 12,099.74.
The Reserve Bank of New Zealand delivers its interest-rate decision on Wednesday, with economists expecting a final quarter point rate hike.
U.S. stocks closed higher for a second straight day on Thursday, with Walmart’s strong earnings and optimism that lawmakers will eventually reach an agreement on raising the U.S. debt ceiling helping underpin sentiment.
Traders also reacted to mixed readings on existing home sales, regional manufacturing activity and weekly jobless claims.
The S&P 500 gained 0.9 percent and the tech-heavy Nasdaq Composite jumped 1.5 percent to reach their best closing levels in about nine months, while the Dow added 0.3 percent.
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