Hong Kong (AFP) – Asian stocks were mixed Thursday following a largely down day on Wall Street, with positive US data offset by elevated government bond yields and oil prices. Analysts said traders were presented with a “Goldilocks” batch of figures that provided a fillip to equities on Wall Street as the dealers revised lower the likelihood of a second consecutive interest rate hike.
The closely watched personal consumption expenditure gauge came in at a below-forecast 3.4 percent, while the Commerce Department revised upwards its estimate for second-quarter economic growth thanks to the artificial intelligence investment boom. Private job creation topped expectations. The readings pointed to a healthy economy despite the impact of the Middle East crisis and surging oil prices, and saw investors row back their expectations on the Federal Reserve lifting borrowing costs on October 28. CME’s FedWatch tool put the chances of an increase at less than 40 percent, having priced it at more than 65 percent earlier in the week.
“Second-quarter growth was stronger than expected, consumer spending was more robust, the labor market rebounded sharply in September, and the Fed’s preferred inflation gauge came in well below expectations,” said Chris Osmond of Fifth Third Wealth Advisors. “The net effect is broadly supportive of risk assets and materially reduces the probability of an October rate hike.”
However, investors remain concerned about the outlook for borrowing costs, with the US 10-year Treasury yield sitting around its highest level since 2007, and the US 30-year yield at a 24-year high. Elevated oil prices remain a crucial driver of the spike, with the commodity supported by uncertainty in the Middle East, even as Saudi Arabia pumps more fuel through its partially reopened East-West pipeline. Both main contracts edged down Thursday after having jumped around one percent the day before.
Brent for December delivery was around $97.60 a barrel — the November contract closed at more than $103 — while West Texas Intermediate was hovering below $90. In New York trade, the Dow and S&P 500 ended in the red, though the Nasdaq rose on the back of a tech rally sparked by a healthy forecast from chip giant Micron, even as it warned on narrower margins.
Chip firms led gains in Asia, with SK Hynix and Samsung’s advances lifting Seoul’s market, while Tokyo’s Nikkei rallied thanks to big gains in tech giants Kioxia, Advantest, Tokyo Electron, and investor SoftBank. Taipei and Singapore also gained, though there were losses in Sydney, Wellington, Manila, and Jakarta.
– Key figures at around 0230 GMT –
Tokyo – Nikkei 225: UP 2.4 percent at 68,355.81
Hong Kong – Hang Seng Index: Closed for a holiday
Shanghai – Composite: Closed for a holiday
West Texas Intermediate: DOWN 0.3 percent at $90.11 per barrel
Brent North Sea Crude: DOWN 0.1 percent at $97.93 per barrel
Dollar/yen: UP at 158.04 yen from 157.38 yen on Tuesday
Euro/dollar: UP at $1.1333 from $1.1325
Pound/dollar: UP at $1.3268 from $1.3257
Euro/pound: UP at 85.42 pence from 85.41 pence
New York – Dow: DOWN 0.9 percent at 50,906.05 (close)
London – FTSE 100: DOWN 0.3 percent at 10,606.00 (close)
© 2024 AFP
