Asian Shares Gain On Strong Tech Earnings

Asian stocks advanced on Friday after solid earnings from Meta Platforms boosted sentiment on Wall Street overnight.

Regional gains were capped by mixed earnings results released after the U.S. market close as well as caution ahead of key inflation data due out later in the day and next week’s Fed meeting.

The Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred gauge of inflation, will be featured in the New York session.

Markets currently expect the Fed to raise interest rates by 25 basis points at its meeting next week.

Chinese shares rallied after the country’s central boosted short-term liquidity via reverse repos. The benchmark Shanghai Composite Index closed 1.1 percent higher at 3,323.27. Hong Kong’s Hang Seng Index inched up 0.3 percent to 19,894.57.

Japanese shares posted strong gains, the yen slumped and government bonds rallied after the Bank of Japan kept rates ultra-low and announced a broad review of its longstanding monetary easing measures.

In its first meeting under new Governor Kazuo Ueda, the central bank scrapped its guidance on future interest rate levels, which previously said that rates would stay at “current or lower levels.”

Data earlier today showed consumer inflation in Japan’s capital rose more than expected in April. The unemployment rate in the country rose to 2.8 percent in March versus 2.5 percent expected, while industrial output rose 0.8 percent from the previous month and retail sales jumped 7.2 percent from a year earlier, separate reports showed.

The Nikkei 225 Index surged 1.4 percent to 28,856.44, while the broader Topix closed 1.2 percent higher at 2,057.48.

Seoul stocks extended gains from the previous session as chipmakers rose on expectations for a better outlook. The Kospi edged up 0.2 percent to close at 2,501.53.

South Korea’s retail sales rose 0.4 percent in March from February and 0.5 percent from a year ago, official data published earlier in the day revealed.

Australian markets snapped a five-day losing streak, with miners and banks leading the rebound. The benchmark S&P/ASX 200 Index rose 0.2 percent to 7,309.20, while the broader All Ordinaries Index gained 0.3 percent to end at 7,501.

AGL Energy fell about 1 percent after the power producer said it has completed the partial refinancing of debt facilities worth A$1.6 billion ($1.06 billion).

Tech firm Megaport jumped 41.5 percent after forecasting higher FY23 and FY24 earnings.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index closed 0.9 percent higher at 12,019.84 ahead of the RBNZ policy meeting next month.

U.S. stocks rallied overnight as Facebook parent Meta, Comcast and Honeywell all delivered strong first-quarter results and weaker-than-expected GDP data suggested the Fed might end rate hikes in the near term.

U.S. GDP grew 1.1 percent in the first three months of 2023 after expanding by 2.6 percent in the fourth quarter of 2022, the government said in its advance estimate.

The quarterly inflation number within the GDP report came in higher than expected and jobless claims unexpectedly declined in the week ended April 22, underpinning rate hike expectations for next week’s FOMC meeting.

The tech-heavy Nasdaq Composite soared 2.4 percent to log its best single-day gain since March, while the Dow climbed 1.6 percent and the S&P 500 added 2 percent to register their biggest gains since January.

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