The Hang Seng Index and the ASX 200 ended the week on a high note on Friday. Investors responded to Thursday’s softer-than-expected US labor market data, which effectively slammed the door on Fed rate rises. Thursday’s advances in the US equities markets had set the tone for the Friday Asian session. The S&P 500 gained 1.89% on Thursday. The Nasdaq Composite Index and the Dow Jones Industrial Average finished the day up 1.78% and 1.70%, respectively.
On Friday, 10-year US Treasury rates fell in reaction to the Fed’s interest rate target statement. The decline in rates helped riskier investments. The bullish session was aided by Chinese economic figures. A minor increase in service sector activity alleviated concerns about a collapse in private sector activity. US GDP data from Friday fueled wagers on the Fed halting its rate rise cycle. Unexpected increases in the US unemployment rate and slower wage growth altered public opinion towards Fed policy objectives. Slower service sector activity is in line with market expectations for the Fed.
The Nasdaq Composite Index gained 1.38% on Friday, while the Dow and S&P 500 gained 0.66% and 0.94%, respectively. The advances from Friday’s session will most likely set the tone when Japanese markets resume following the Friday vacation. Investors must, however, examine the Asian economic calendar today. Investors will be interested in the finalized service sector PMI statistics for Japan as well as the minutes of the Bank of Japan’s monetary policy meeting. A decrease in the Services PMI might have an impact on the Nikkei. The PMI declined from 53.8 to 51.1 in October, according to preliminary data.
The minutes of the Bank of Japan’s meeting might frighten investors if there is a stronger determination to abandon negative interest rates. Earnings will also be scrutinized. Westpac Banking Corporation (WBC) and Macau hotel firms report earnings. The ASX 200 and Nikkei were up 14 and 450 points, respectively, in the futures markets on Monday.
On Friday, the ASX 200 rose 1.14%. Falling Treasury rates have aided tech stocks. The S&P/ASX 200 Information Technology Index (XIJ) increased by 0.99%, while the All Technology Index (XTX) increased by 1.54%. Bank stocks have joined tech equities in the bullish zone. The share price of National Australia Bank Ltd. (NAB) increased by 1.72%. Westpac Banking Corp. (WBC) and the Commonwealth Bank of Australia (CBA) both gained 1.56% and 1.52% on the day. ANZ Group Holdings Ltd. (ANZ) increased by 0.91%.
Mining and oil stocks performed poorly. BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) both gained 0.26% and 0.69%, respectively, while Fortescue Metals Group Ltd. (FMG) lost 0.09%. Woodside Energy Group Ltd. (WDS) gained 1.56% on the day, while Santos Ltd. (STO) lost 1.20%. The Federal Court’s decision on Thursday to halt building on the Barossa Gas Project pipeline until November 13 weighed heavily. Gold stocks also reacted to the shift in Fed mood and its impact on the US currency and Treasury rates. Northern Star Resources Ltd. and Newmont Corp. (NEM) both gained 1.19% and 0.35%, respectively. The spot price of gold rose 0.35% to $1,992.65.
On Friday, the Hang Seng Index rose 2.52%, boosted by market bets on the Fed and interest rates. Tencent and Alibaba both gained 2.92% and 4.85%, respectively. Bank stocks also performed well on Friday. HSBC and China Construction Bank (0939) gained 2.11% and 1.34%, respectively. The share price of Industrial and Commercial Bank (1398) increased by 0.79%.
For Culture Day, Japanese market were closed on Friday.
Please note that this article does not offer any instructions or suggestions regarding investment decisions. It is important for you to conduct your own research or seek professional advice from a qualified professional before conducting an investment decision.