Asia report: Markets rebound from recent weakness
By Josh White
Date: Thursday 06 Feb 2025
(Sharecast News) - Asia-Pacific markets traded mostly higher on Thursday, rebounding from recent volatility despite lacklustre earnings from major US technology firms.
Investor sentiment was buoyed by Wall Street's gains, with notable strength in Japanese, Chinese, and Hong Kong equities.
"Asian stocks hit a seven-week peak as Wall Street experienced a surge in both stocks and bonds amidst a backdrop of tariffs, lacklustre technology earnings, and mixed economic indicators from the US," said TickMill market strategy partner Patrick Munnelly.
"Shares in China rose as the yen gained strength.
"The MSCI index rose for the third consecutive day, while US market futures ticked higher after the S&P 500 and Nasdaq 100 both made gains on Wednesday."
Munnelly noted that Indian stock indices saw declines, while equities in Hong Kong and mainland China rebounded, recovering from Wednesday's drop and Treasuries declined after a significant jump overnight.
"Thursday's stability contrasts with the market's Monday meltdown, when Trump decided to impose and then delay tariffs on Canada and Mexico.
"The US enacted a 10% tariff on all imports from China, leading China to retaliate with some tariffs on US goods.
"The inconsistent policy measures from the US have dampened investor enthusiasm, with traders weighing the risks of tariffs against the likelihood of improved monetary conditions."
Markets in the green across the region
Japan's Nikkei 225 advanced 0.61% to 39,066.53, supported by a sharp 12.6% rise in Renesas Electronics, while Bandai Namco and Nippon Electric Glass climbed nearly 10%.
The broader Topix index edged up 0.25% to 2,752.20.
Chinese markets posted strong gains, with the Shanghai Composite rising 1.27% to 3,270.66 and the Shenzhen Component surging 2.26% to 10,393.63.
Routon Electronic, Inner Mongolia First Machinery Group, and Lotus Health Group each gained over 10%.
Hong Kong's Hang Seng Index climbed 1.43% to 20,891.62, led by a 19.58% jump in BYD Electronic International and an 11.51% rise in its parent company, BYD Co.
Sunny Optical Technology also posted strong gains, rising 9.88%.
South Korea's Kospi 100 gained 1.15% to 2,537.86, driven by a surge in SK Biopharmaceuticals, which jumped 17.16%.
Hyundai-Rotem and SKC also posted solid advances, gaining 17.02% and 6.47%, respectively.
Australia's S&P/ASX 200 added 1.23% to close at 8,520.70, with News Corporation rising 5.77%, while Spartan Resources and Westgold Resources saw gains of over 3%.
Markets in New Zealand remained closed for the Waitangi Day national holiday.
In currency markets, the dollar was last down 0.01% on the yen, trading at JPY 152.59, while it gained 0.37% against the Aussie to AUD 1.5970, and advanced 0.52% on the Kiwi, changing hands at NZD 1.7672.
Oil prices moved higher, with Brent crude futures last up 0.42% on ICE at $74.92 per barrel, and the NYMEX quote for West Texas Intermediate climbing 0.61% to $71.46.
BoJ could raise interest rates, India expected to cut
The Bank of Japan was in the headlines on Thursday, amid reports that it could raise short-term interest rates to around 1% by the second half of 2025, according to board member Naoki Tamura, citing the need to manage inflation risks and ensure stable price growth.
Tamura indicated that by then, with annual wage increases confirmed, Japan's economy would likely meet the central bank's 2% inflation target in a sustainable manner.
Meanwhile, India's central bank was expected to lower its benchmark interest rate at the conclusion of its policy meeting on Friday, as cooling inflation provided room to support economic growth.
Analysts were anticipating a 25-basis-point cut to 6.25%, marking the start of a gradual easing cycle.
Indian bonds have strengthened in anticipation, with the 10-year benchmark yield dropping 16.5 basis points in the past three weeks to 6.664% as of Wednesday's close, according to LSEG data.
Reporting by Josh White for Sharecast.com.
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