Asian stocks rose on Friday as concerns about an approaching recession in the United States eased, while somewhat positive inflation data from China also helped boost sentiment.
But regional markets are still heading towards weekly losses after recording sharp declines at the start of the week.
Asian stocks benefited from positive support from Wall Street, as better-than-expected jobless claims data fueled hopes that the US labor market is not in as dire a state as initially feared.
U.S. stock index futures were slightly higher during Asian trading.
Chinese Markets Lag, But CPI Data Positive
Chinese and U.S. stock indexes each rose 0.3%, relatively less than most of their Asian peers. Both indexes fell about 0.8% this week, their third straight week of losses.
But the country’s inflation data showed some improving trends. Inflation rose more than expected, while inflation contracted at a slower pace than expected.
The reading indicated that the series of interest rate cuts by the People’s Bank of China in July was bearing some fruit, although it remains unclear whether the deflationary trend in China will be reversed in a sustainable manner.
Sentiment towards Chinese markets has weakened sharply in recent weeks, following a series of weak economic readings from the country. The country’s benchmark indexes remain near six-month lows.
Japanese stocks rise, trim weekly losses sharply
Japanese and US stock indexes rose 2% and 1.5%, respectively, on Friday.
Both stocks are still expected to lose about 1.5% this week, but they have also recovered most of the losses they suffered earlier in the week.
The rebound in Japanese markets came as Bank of Japan officials tried to downplay the unexpectedly hawkish messages the central bank delivered last week.
Bargain hunting in tech-heavy stocks also helped Japanese indexes, as did positive earnings from major companies including Tokyo Electron. The stock rose 1.7% after posting stronger-than-expected earnings for the June quarter, pointing to increased demand from the artificial intelligence sector.
Broader Asian stocks were higher, with technology-heavy bourses such as South Korea’s benchmark and Hong Kong’s index rising between 1.5% and 2%. Gains in the technology sector came in line with a rebound in U.S. markets.
The Australian stock index rose 1.4% and fell 1.9% this week, recovering most of its losses this week.
India index futures pointed to a slightly positive open, after the index fell on Thursday after the central bank adopted an unexpectedly hawkish tone, while also slightly lowering its growth forecast for the current quarter.