Asian stocks jump as technology keeps up with US profit boom; BOJ disappoints
Friday's advances in most Asian stocks came from the technology sector, as investors were encouraged by Microsoft and Alphabet's good profits. However, investors' expectations for more clues regarding interest rates held sentiment in check.
Following conflicting signals from the Bank of Japan, which raised questions about its ability to hike interest rates much higher, Japanese markets began to rise.
Local exchanges followed the steep increase in U.S. stock index futures as the IT giants Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc (NASDAQ:GOOGL) reported better-than-expected earnings. In after-hours trading, both stocks shot up, with Alphabet reaching a record high.
A dismal Wall Street overnight close was mostly offset by gains in U.S. tech companies, which came after GDP price index increased and gross domestic product data came in lower than predicted. The Federal Reserve's favored inflation indicator, the PCE price index data, which is expected later in the day, was suddenly the center of attention.
Both the Nikkei 225 index and the larger TOPIX in Japan increased by 0.7% and 1%, respectively, following the BOJ's announcement.
As anticipated, the central bank maintained stable interest rates. However, the central bank cut its growth projections for the Japanese economy at the same time as it predicted higher inflation in the years to come.
Concerns were expressed about how much leeway the BOJ will have to boost interest rates after a historic hike in March due to the weaker GDP expectations.Tokyo's consumer price index inflation data, which was softer than anticipated, raised more questions about the BOJ. The nation's bellwether, Tokyo, saw lower-than-expected inflation in April, falling short of the BOJ's 2% annual objective.
Concerns were expressed about how much leeway the BOJ will have to boost interest rates after a historic hike in March due to the weaker GDP expectations.Tokyo's consumer price index inflation data, which was softer than anticipated, raised more questions about the BOJ. The nation's bellwether, Tokyo, saw lower-than-expected inflation in April, falling short of the BOJ's 2% annual objective.
The demand for artificial intelligence, which was a major factor in the earnings beat, raised expectations that the U.S. tech giants' positive earnings would continue to support tech valuations in the upcoming quarters. China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes increased by 0.8% and 0.6%, respectively, due to gains in technology.While traders were cautious due to increased volatility in Indian markets as the general elections for 2024 got underway, the Nifty 50 index in India saw a minor increase.
The only index that underperformed for the day was Australia's ASX 200, which fell 1.3% in catch-up trading on Thursday following a holiday. The mining behemoth BHP Group Ltd (ASX:BHP) saw a 4.4% decline, which put pressure on the index following the miner's almost $39 billion bid for its smaller peer Anglo American PLC (LON:AAL).Data indicating a rise in producer price index inflation during the first quarter, a sign of higher interest rates for extended periods of time, also rattled Australian markets.
| Name | Last | Chg. % | Vol. |
|---|---|---|---|
| 170.18 | +4.97% | 123.18M | |
| 441.38 | -10.56% | 81.83M | |
| 169.89 | +0.51% | 47.93M | |
| 173.67 | -1.65% | 43.43M | |
| 826.32 | +3.71% | 40.15M | |
| 399.04 | -2.45% | 34.49M |
| 611,740 | -0.27% | 12.48K |
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