Asian shares traded higher on Friday, buoyed by ongoing optimism about technology companies and global economic stability, despite mixed trading on Wall Street the previous day.
Japan’s Nikkei 225 saw a 0.5% increase, reaching 38,566.40, supported by positive economic data. Industrial production in Japan rose by 2.8% in July, rebounding from a 4.2% decline in June. Although this figure was slightly below market expectations, it signals growth. The unemployment rate also edged up to 2.7% from 2.5% in June. Tokyo’s consumer prices surged to 2.6% year-on-year in August, surpassing July’s 2.2% increase, driven by higher costs for food and utilities. This rise in inflation is likely to influence the Bank of Japan’s decision on potential interest rate hikes, expected later this year or early next year.
In Australia, the S&P/ASX 200 rose by 0.3% to 8,071.90, while South Korea’s Kospi gained 0.6% to 2,677.19. Hong Kong’s Hang Seng surged 1.8% to 18,100.00, and the Shanghai Composite jumped 0.3% to 2,860.89.
On Wall Street, trading was mixed on Thursday as a late-afternoon drop in some major technology stocks offset earlier gains. The S&P 500 ended flat, having given up a nearly 1% gain, and remains about 1.3% shy of its record set in July. The Dow Jones Industrial Average managed a 0.6% gain, marking its third all-time high in a week. The Nasdaq Composite, which is heavily influenced by technology stocks, fell by 0.2%, despite an early rise of 1.3%.
Despite the mixed performance, advancers outnumbered decliners by about two to one on the New York Stock Exchange. Nvidia, a major player in the AI sector, was a significant drag on the market, with its shares falling 6.4% despite strong second-quarter results. The stock, which has seen a 138% increase in 2024, remains a major market influencer with a total market value surpassing $3 trillion.
In positive news, the U.S. Commerce Department revised its estimate for second-quarter economic growth up to 3%, from a previous estimate of 2.8%. This upward revision reflects robust consumer spending, which has helped drive economic momentum despite persistent inflation and high interest rates. August data has been encouraging, showing strength in retail sales, employment, and consumer confidence.
Bill Adams, chief economist for Comerica Bank, noted, “Solid growth of consumer spending propelled the economy forward in the second quarter, and the increase in consumer confidence in July suggests continued growth in the latter half of the year.”
The key economic report for the week will be released on Friday, with the U.S. government set to unveil its July inflation data through the Personal Consumption Expenditures (PCE) report. Economists anticipate a slight increase in inflation to 2.6% in July from 2.5% in June, a significant drop from the 7.1% peak in mid-2022.
Expectations are rising for the Federal Reserve to begin cutting its benchmark interest rate, with traders anticipating the first cut at the September meeting and a total reduction of 1% by year-end.
In the bond market, yields rose, with the 10-year Treasury yield increasing to 3.86% from 3.84% late Wednesday.
In energy markets, U.S. crude oil prices rose by 18 cents to $76.09 per barrel, while Brent crude, the international benchmark, increased by 23 cents to $80.17 per barrel.
Currency trading saw the U.S. dollar fall to 144.84 Japanese yen from 145.02 yen, and the euro declined slightly to $1.1075 from $1.1082.
I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna Sahu holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.
