Asia’s major stock indexes saw a mixed end to the week with investor mood impacted by mixed China data, hotter-than-hoped US inflation and rising oil prices as a result of escalating tensions in the Red Sea.
Oil climbed after the United States and Britain launched strikes from the air and sea against Houthi military targets in Yemen in response to the group’s attacks on ships in the Red Sea, a dramatic regional widening of the Israel-Hamas war in Gaza.
Nevertheless, Japan’s Nikkei share average scaled another 34-year peak, recording its best week since March 2022, underpinned by receding bets on an early exit from stimulus by the Bank of Japan (BOJ) and sheer momentum as foreign investors returned.
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The Nikkei closed 1.50% higher, or 527.25 points, at 35,577.11, after rising as much as 2.25% to 35,839.65 for the first time since February 1990, sparking fears in some corners that it is overheating.
The index has rallied nearly 7% and marked a multi-decade high every trading day this week. The broader Topix was ahead 0.46%, or 11.36 points, to 2,494.23.
China and Hong Kong stocks edged back on mixed economic data, while the market waits on an expected key policy rate cut early next week.
China’s exports grew 2.3% in December from a year earlier, data showed on Friday, adding to signs global trade is slowly turning a corner with the prospect of lower borrowing costs on the horizon.
Meanwhile, China’s consumer prices declined for a third month in December, though moderated, while factory-gate prices extended their prolonged slide, highlighting persistent deflationary pressures in an economy struggling to mount a solid recovery.
China’s blue-chip CSI300 Index dropped 0.35%, while the Shanghai Composite Index fell 0.16%, or 4.67 points, to 2,881.98. The Shenzhen Composite Index on China’s second exchange dropped 0.64%, or 11.35 points, to 1,749.42.
In Hong Kong, the Hang Seng Index fell 0.35%, or 57.46 points, to 16,244.58, dragged down by electric carmakers, with Xpeng and Li Auto down 4.8% and 2.8%, respectively.
US Dollar Index Flat
Elsewhere across the region, in earlier trade, there were also gains in Mumbai, Wellington, Manila and Jakarta. Sydney, Singapore, Seoul and Taipei were in the red.
MSCI’s broadest index of Asia-Pacific shares outside Japan inched 0.1% higher, but was still headed for a weekly drop of 0.7%.
European markets were set to open higher, with Eurostoxx 50 futures jumping 0.7% and FTSE futures up 0.4%. US stock futures were, however, slightly lower.
Overnight, Wall Street reversed earlier declines and was mostly flat on the day after data showed US consumer prices rose more than expected in December, with a closely watched core measure coming in slightly above consensus.
Fed officials took few fresh signals from the inflation data, with Richmond Fed President Thomas Barkin saying it did little to clarify the path of prices.
Treasuries were steady in Asia, led by the short end of the curve. The two-year yield was at 4.2722% in Asia, having fallen 11 bps points overnight, while the 10-year was little changed at 3.9767%, after easing 5 bps overnight.
In the foreign exchange market, the dollar failed to make any headway from the slightly firmer-than-expected US inflation data. The dollar index was little changed at 102.27 against its major peers, after ending the previous session slightly lower.
Key figures
Tokyo – Nikkei 225 > UP 1.50% at 35,577.11 (close)
Hong Kong – Hang Seng Index < DOWN 0.35% at 16,244.58 (close)
Shanghai – Composite < DOWN 0.16% at 2,881.98 (close)
London – FTSE 100 > UP 0.86% at 7,641.95 (0934 GMT)
New York – Dow > UP 0.04% at 37,711.02 (Thursday close)
- Reuters with additional editing by Sean O’Meara
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China’s Deflation And Weak Economy Point to Another Bumpy Year
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Nikkei Leaps to New 34-Year Peak, Tech Sparks Hang Seng Rally
