Asia’s stock markets showed positive movements on Friday, with Hong Kong and Chinese markets leading the gains driven by China’s efforts to boost its economy. Japan’s Nikkei 225 index rose over 1% amid a leadership election within the ruling Liberal Democratic Party to determine the country’s next prime minister. The expected change in leadership is unlikely to result in significant policy shifts due to similarities among the leading contenders.
China’s central bank announced cuts to its reserve requirement for banks as part of measures to support the property sector and financial markets. The Hang Seng in Hong Kong surged 3.7% to 20,659.03, while the Shanghai Composite index climbed 2.1% to 3,065.29.
However, the Shanghai Stock Exchange experienced technical glitches that delayed order processing upon opening on Friday. This led to a 6.4% spike in the Shenzhen index as investors shifted focus to the alternative market during the disruption. Trading resumed as usual by midday, with the exchange stating that an investigation into the root causes of the malfunction was underway.
In a concerning economic development, China reported an almost 18% year-on-year decline in industrial profits for August, highlighting persistent challenges facing the world’s second-largest economy. Meanwhile, shares of Hong Kong’s New World Development soared by 21.5% following the replacement of its third-generation leader, Adrian Cheng, after the firm issued a profit warning resulting in a substantial annual loss of over $2.4 billion – its first loss in nearly two decades.
The Nikkei 225 index in Japan rose by 1.4% to 39,451.25 as Tokyo’s consumer inflation cooled to 2.2% year-on-year in September, aligning with market expectations. Across Asia, Australia’s S&P/ASX 200 edged up by nearly 0.1% to 8,208.70, while South Korea’s Kospi dipped by 0.2% to 2,666.01.
In the U.S., the S&P 500 reached a record high of 5,745.37, marking the 42nd time this year and the third time in the week. The Dow Jones Industrial Average climbed 0.6% to 42,175.11, and the Nasdaq composite increased by 0.6% to 18,190.29. Micron Technology led the gains with a 14.7% jump after surpassing profit expectations in the latest quarter, benefiting from the demand for artificial intelligence technology.
Furthermore, Jabil saw an 11.7% increase following better-than-expected profit and revenue reports, along with plans to repurchase up to $1 billion of its stock. Super Micro Computer experienced the most significant decline in the S&P 500, dropping 12.2% due to reports of a U.S. Department of Justice investigation, causing a partial retreat from its substantial gains driven by AI-related activities.
On the economic front, reports indicated a positive outlook for the U.S. economy, with fewer unemployment benefit applications and a 3% annual growth rate during the spring. Wall Street anticipates steady economic growth, supported by the Federal Reserve’s ongoing interest rate cuts aimed at sustaining corporate profits.
Benchmark U.S. crude oil declined to $67.52 per barrel, while Brent crude, the global standard, fell to $70.90 per barrel. The U.S. dollar strengthened against the Japanese yen, reaching 145.24 yen from 144.80, and against the euro, trading at $1.1170 from $1.1176.