Asian stocks track Wall Street gains after encouraging US jobs data calm jitters over the economy

NEW YORK: Asian stocks were higher Friday after US stocks rallied Thursday in Wall Street's latest sharp swerve after a better-than-expected report on unemployment eased worries about the slowing economy.

US futures and oil prices rose.

In Tokyo, the Nikkei 225 index was up 1.6 per cent at 35,380.23. The yen again fell under pressure after three days of rising against the dollar, giving a lift to Japanese stocks that often rise when the yen falls.

Earlier this week, weaker-than-expected employment data from the US raised concerns about a slowing economy where the Federal Reserve has kept the high interest rates that aim to stifle inflation for too long. That tipped off a sell-off in global markets, with the scale of the declines amplified as investors unwound their yen carry trade positions.

On early Friday trading, the US dollar rose to 147.15 Japanese yen from 147.24 yen. The euro cost USD 1.0924, up from USD 1.0918.

China's inflation came in higher than expected in July, with the consumer price index rising 0.5 per cent compared to the same period a year earlier, boosted by food prices which are no longer dragging on inflation and were flat last month.

The Hang Seng in Hong Kong added 1.9 per cent to 17,211.26 and the Shanghai Composite index edged 0.2 per cent higher to 2,876.51.

In South Korea, the Kospi jumped 1.5 per cent to 2,595.50, Australia's S&P/ASX 200 advanced 1.4 per cent to 7,792.80.

Elsewhere, Taiwan's Taiex gained 3.4 per cent, with chip maker Taiwan Semiconductor Manufacturing Co. gaining 3.6 per cent, tracking Big Tech stocks' rally on Wall Street. The SET in Bangkok was up 0.5 per cent.

On Thursday, the S&P 500 jumped 2.3 per cent to 5,319.31, for its best day since 2022 and shaved off all but 0.5 per cent of its loss from what was a brutal start to the week. The Dow Jones Industrial Average rose 1.8 per cent to 39,446.49, and the Nasdaq composite climbed 2.9 per cent to 16,660.02 as Nvidia and other Big Tech stocks helped lead the way.

Treasury yields also climbed, signalling that investors are feeling calmer about the economy after a report showed fewer US workers applied for unemployment benefits last week. The number was better than economists expected.

So far, the S&P 500 is still down nearly 10 per cent from its all-time high set last month. Such drops are regular occurrences on Wall Street, and “corrections” of 10 per cent happen roughly every year or two. After Thursday's jump, the index is within about 6 per cent of its record.

Still, the market's swings look more like a “positioning-driven crash” caused by too many investors piling into similar trades and then exiting them together, rather than the start of a long-term downward market caused by a recession, according to strategists at BNP Paribas.

They say it looks more similar to the “flash crash” of 2010 than the 2008 global financial crisis or the 2020 recession caused by the pandemic.

In the meantime, big US companies continue to turn in profit reports for the spring that are mostly better than analysts expected.

Eli Lilly jumped 9.5 per cent to help lead the market after it delivered stronger profit and revenue than Wall Street had forecast. Sales of its Mounjaro diabetes treatment and its Zepbound weight-loss counterpart are booming, and the company raised its financial forecast for the year.

In the bond market, the yield on the 10-year Treasury rose to 3.99 per cent from 3.95 per cent late Wednesday.

In energy trading, benchmark US crude added 16 cents to USD 76.35 a barrel. Brent crude, the international standard, rose 10 cents to USD 79.36 a barrel.