Asian markets rose Friday after Wall Street rallied ahead of a speech by Federal Reserve Chairman Jerome Powell, who is expected to repeat his plan to raise interest rates to fight inflation.
Signs of progress in talks between US and Chinese regulators that could prevent tech giants such as Alibaba and JD.com from being delisted from New York added to the strong buying sentiment.
After nearly two months of gains from June lows, the global Stocks have tumbled in recent weeks.
All eyes are on Powell’s remarks at the annual symposium of top bankers and financial officers in Jackson Hole, Wyoming, late Friday.
Many expect him to confirm that further rate hikes are on the way as officials seek to bring inflation down from a painful 40-year high.
Analysts say many board members are lined up this week, but hawkish trends are heavily embedded in market prices.
The key question now is how much banks will tighten in the coming months, after two 3/4 moves in June and July, with a 0.5pt gain expected next month. That’s what it means.
Wall Street’s three main indices posted big gains on Thursday, with the Nasdaq and S&P 500 up more than 1%.
And Asia followed the lead, with Tokyo, Sydney, Seoul, Singapore, Taipei and Wellington all rising.
– U.S.-China Techboost –
Hong Kong and Shanghai were among the top performers in tech companies’ surge, thanks to news of ongoing regulatory talks between China and the US.
More than 200 Chinese companies have faced the threat of delisting in New York for months as they become embroiled in widespread disputes between the superpowers.
But Thursday’s report said the Chinese government had asked major accounting firms to submit audit documents of US-listed companies to Hong Kong to prepare them for review by US officials.
U.S. lawmakers have set a 2024 deadline for the removal of companies that do not comply with listing rules, and the latest move could provide a big step towards avoiding that.
Daisy Li of EFG Asset Management said:
“Still, we have to see if the US side actually accepts the disclosure. If this is resolved, it could help reduce some of the geopolitical risk premiums in the Chinese market.”
The report comes as China unveils plans to inject tens of billions of dollars to boost its sluggish economy to start lending, consuming and investing.
Analysts, however, warn that while cash injections are welcome, investors are looking more keenly at the easing of the zero-Covid policy that has led to major city lockdowns and hard-hit industries.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: up 0.9% to 28,745.42 (break)
Hong Kong – Hang Seng Index: up 0.7% at 20,100.06
Shanghai – Overall: up 0.5% at 3,260.75
EUR/USD: 0.9970, up from 0.9968 on Thursday
GBP/USD: down from $1.1826 to $1.1823
EUR/GBP: rose to 84.33p from 84.28p
Dollar/yen: 136.36 yen → 136.76 yen UP
West Texas Intermediate: up 1.0% to $93.41 a barrel
Brent North Sea Crude: Up 1.0% at $100.34
New York – Dow: up almost 1.0% at 33,291.78 (close)
London – FTSE 100: up 0.1% at 7,479.74 (close)
