Asian shares trade higher after mixed trading on Wall Street

Asian shares mostly rose Friday as markets continued to be moderately optimistic about the prospects of technology companies and the relative health of global economies.

Japan’s benchmark Nikkei 225 added 0.5 per cent to reach 38,566.40 after data on the world’s fourth largest economy came in mostly positive.

Industrial production rose 2.8 per cent in July from the previous month, a rebound from minus 4.2 per cent in June, according to Ministry of Economy, Trade and Industry. That was weaker than what the market had expected, but a sign of growth. In other findings, the unemployment rate rose to 2.7 per cent in July, up from 2.5 per cent in June.

Tokyo consumer prices rose more than expected to 2.6 per cent year on year in August, up from 2.2 per cent in July, as prices of food and utilities surged. That’s almost certain to catch the attention of the Bank of Japan as it mulls when to raise interest rates, a move that’s expected later this year or early next year.

Australia’s S&P/ASX 200 gained 0.3 per cent to 8,071.90. South Korea’s Kospi added 0.6 per cent to 2,677.19. Hong Kong’s Hang Seng surged 1.8 per cent to 18,100.00, while the Shanghai Composite jumped 1/3 per cent to 2,860.89.

On Wall Street, a late-afternoon slide by some Big Tech companies cut into earlier gains Thursday, leading to a mixed finish for US stock indexes.

The S&P 500 ended flat after giving up an earlier gain of nearly 1 per cent. The benchmark index is about 1.3 per cent away from its record set in July.

The Dow Jones Industrial Average managed a 0.6 per cent gain, enough for its third all-time high since Monday. The Nasdaq composite, which is heavily weighted with technology stocks, slipped 0.2 per cent. It had been up 1.3 per cent in the early going.

Despite the mixed finish, gainers outnumbered decliners by roughly two to one on the New York Stock Exchange.

Nvidia, which has ridden the frenzy over artificial intelligence to become one of the S&P 500’s most influential companies, was the biggest weight on the market. Its shares fell 6.4 per cent despite stellar results for the second quarter. The stock, with a total market value topping USD 3 trillion, is still up 138 per cent in 2024.

In a bit of positive news, the Commerce Department upgraded its assessment of US economic growth for the second quarter to 3 per cent, compared to a previous estimate of 2.8 per cent. It’s another signal that the economy remains strong, despite pressure from stubborn inflation and high interest rates.

The mostly solid earnings and economic growth updates are capping off a month of encouraging reports for the broader economy. Data from various reports in August have shown that retail sales, employment and consumer confidence remain strong.

“Solid growth of consumer spending propelled the economy forward in the second quarter, and the increase of consumer confidence in July suggests it will propel growth in the second half of the year as well,” said Bill Adams, chief economist for Comerica Bank.

The key report this week comes on Friday, when the US government releases its July data on inflation with the PCE, or personal consumption and expenditures report. Economists expect the PCE, which is the Federal Reserve’s preferred measure of inflation, to show that inflation edged up to 2.6 per cent in July from 2.5 per cent in June. It was as high as 7.1 per cent in the middle of 2022.

Hopes are growing for the Federal Reserve to start cutting its benchmark interest rate. Traders expect the first cut to happen at the next meeting in September. The market is betting that the Fed will cut its benchmark rate by 1% by the end of the year.

Bond yields rose in the Treasury market. The yield on the 10-year Treasury rose to 3.86 per cent from 3.84 per cent late Wednesday.

All told, the S&P 500 lost 0.22 points to 5,591.96. The Dow gained 243.63 points to 41,335.05. The Nasdaq fell 39.60 points to 17,516.43.

In energy trading, benchmark US crude gained 18 cents to USD 76.09 a barrel. Brent crude, the international standard, rose 23 cents to USD 80.17 a barrel.

In currency trading, the US dollar fell to 144.84 Japanese yen from 145.02 yen. The euro cost USD 1.1075, down from USD 1.1082.