Most Asian stocks rose on Friday, with technology shares recovering a measure of steep losses this week as Treasury yields eased, although most regional indexes were still headed for weekly losses.
Uncertainty over the Israel-Hamas war and rising yields saw Asian markets log sharp losses this week, while anticipation of a series of major central bank meetings next week also kept investors largely risk-averse.
Middling earnings from Wall Street also provided weak cues to regional stocks, particularly the technology sector.
Tech rout batters Asian shares this week
South Korea’s KOSPI rose 0.8% on Friday, but was among the worst performers this week, down 2.7%, as heavyweight tech stocks logged steep declines.
Losses in Japanese tech stocks put the Nikkei 225 on course for a 1% weekly decline, even as the index rebounded 1.5% on Friday.
Data showed inflation in Tokyo grew more than expected in October, pointing to a resurgence in nationwide inflation and potentially drawing a more hawkish tilt from the Bank of Japan, when it meets this coming Tuesday.
Hong Kong’s Hang Seng was among the better performers, rising 1.6% on Friday and staying on course for a mildly positive week. But the index was still trading close to a 11-month low hit earlier in October.
Futures for India’s Nifty 50 index pointed to a stronger open, after the index fell for six consecutive sessions. But the Nifty was the worst performer in Asia this week, down 3.5% on its heavy tech exposure.
U.S. Treasury yields retreated in overnight trade, offering some relief to the tech sector as sentiment improved on stronger-than-expected gross domestic product data. But yields still remained within sight of multi-year peaks, with the Fed meeting next week largely set to determine their direction.
Chinese shares among better weekly performers on stimulus hopes
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.4% and 0.2%, respectively, and were among the better performers in Asia this week after the government announced a massive bond issuance to spur local economic growth.
The two indexes, along with the Hang Seng, were set to end the week between 0.2% and 0.4% higher.
Data on Friday also showed that Chinese industrial profits improved slightly in September, but were still down 9% so far this year.
Australia’s ASX 200 rose 0.5% on Friday tracking some optimism over China, but was set to lose 0.8% this week.
Fed anticipation keeps stocks on edge
While regional stocks clocked some gains on Friday, sentiment remained largely negative in anticipation of a Federal Reserve meeting next week.
The central bank is widely expected to keep rates on hold. But Fed officials have kept the door open for at least one more hike this year. U.S. rates are also set to remain higher for longer.
Any hawkish signals from the U.S. central bank are likely to spur more losses in the stock market.
