HONG KONG — On Friday, stocks in Asia demonstrated a largely positive trend, with the exception of Japan, as investors remained focused on the upcoming election scheduled for Sunday. U.S. futures showed a decline, while oil prices experienced an uptick.
Japanese Prime Minister Shigeru Ishiba, who recently assumed office, has called a snap general election in an effort to rally support amidst a political funding scandal affecting the ruling Liberal Democrats. The political uncertainties have complicated the Bank of Japan’s strategy to move away from persistent near-zero interest rates.
According to government reports, core inflation in Tokyo was recorded at 1.8% in October, marking the first time it fell below the central bank’s 2% target in five months. This development has increased speculation that the central bank will maintain its key interest rate in the upcoming policy meeting next week.
In terms of market performance, Tokyo’s Nikkei 225 index saw a decline of 1%, closing at 37,771.79. In contrast, the Japanese yen appreciated against the U.S. dollar, as it traded at 151.64 yen, sliding slightly from the previous day’s 151.89 yen.
Hong Kong’s Hang Seng index advanced by 1.1%, finishing at 20,720.60, and the Shanghai Composite rose by 0.8% to 3,307.14. The People’s Bank of China maintained its medium-term lending rate at 2% and announced the issuance of 700 billion yuan (approximately $98.3 billion) in one-year medium-term lending facility loans to various financial institutions.
Additionally, South Korea’s Kospi gained 0.3% to reach 2,590.30, and Australia’s S&P/ASX 200 increased by 0.1% to settle at 8,216.50. Taiwan’s Taiex also saw growth, rising by 0.3%.
In the United States, the S&P 500 rose by 0.2% to finish at 5,809.86, breaking a three-day streak of losses for the first time since early September. The market fluctuated between gains and losses throughout the day, with an almost equal number of stocks advancing and declining.
Meanwhile, the Dow Jones Industrial Average declined by 0.3% to close at 42,374.36, while the Nasdaq composite posted a gain of 0.8% to end at 18,415.49. Tesla led the market with a remarkable rise of 21.9% following the announcement of profits that surpassed analysts’ expectations for the latest quarter. CEO Elon Musk forecasted sales growth between 20%-30% for next year; however, the most recent quarter’s revenue did not meet analysts’ forecasts. This marked the most significant single-day gain for Tesla’s shares since 2013.
Conversely, Boeing shares fell by 1.2% after machinists voted to extend their ongoing strike, which has severely affected aircraft manufacturing. With over 60% of union members rejecting a proposed contract, the strike has now entered its sixth week.
The stock market has faced challenges this week after both the S&P 500 and Dow reached record highs at the close of the previous week. Rising Treasury yields in the bond market have diminished investor appetite for high-priced stocks. This comes amid criticisms regarding stock valuations, which have increased at a rate outpacing corporate earnings.
Economic data released on Thursday regarding unemployment claims presented a mixed outlook for the job market. Although there was a decline in new applications for unemployment benefits, indicating fewer layoffs, the total number of individuals receiving benefits rose to the highest level in nearly three years.
Following the release of this report, Treasury yields experienced fluctuations. The yield on the 10-year Treasury eased from 4.25% to 4.20%, though it still remained above the 4.08% level reached at the end of the previous week.
Additionally, a preliminary report suggested that there might have been a slight acceleration in U.S. business activity last month, as improvements in the services sector counteracted weaknesses in manufacturing. The same report indicated a rebound in business confidence, with expectations for increased stability following the forthcoming presidential election.
In another economic indicator, reports showed that new home sales exceeded economists’ forecasts last month.
In commodities, benchmark U.S. crude oil rose by 10 cents to $70.29 per barrel, while Brent crude, the global benchmark, increased by 13 cents to reach $74.16 per barrel. The euro also saw a decline, falling to $1.0821 from the previous $1.0828.