Most markets rose in Asia on Friday following another record close on Wall Street ahead of US jobs data, while Tokyo led gains on hopes for fresh stimulus after Japanese Prime Minister Yoshihide Suga said he would step down.
The broad advance came at the end of a strong week as concerns about the fast-spreading Delta variant of SARS-CoV-2, which weighed on confidence for much of last month, gave way to optimism over the recovery outlook.
Data showing fewer people than expected applied for jobless benefits in the US last week — the lowest since March last year — provided a positive lead ahead of the non-farm payrolls.
US Federal Reserve Chair Jerome Powell last week indicated that the bank would take it easy in winding down the financial support — and would be even more careful in lifting interest rates — but offered no timetable for doing so.
The S&P 500 and NASDAQ on Thursday finished at fresh records after the figures, and the buying filtered through to Asia.
The MSCI Asia-Pacific Index on Friday rose 0.9 percent to 204.9, up 3.8 percent for the week.
The TAIEX on Friday added 1.14 percent to 17,516.92 points, taking its weekly gain to 1.8 percent.
The Nikkei 225 in Tokyo jumped 2.05 percent after Suga said he will not run for his ruling party’s leadership, effectively ending his tenure as prime minister and throwing wide open the race to succeed him.
The benchmark index soared 5.4 percent for the week.
The TOPIX added 1.6 percent on Friday, carrying its weekly gain to 4.5 percent.
Analysts said the gains on Friday were fueled by hopes the next leader will push for a huge spending package to support the virus-hit economy. Suga’s rival in the race for the post last year, Fumio Kishida, on Thursday called for tens of trillions of yen in spending to battle the COVID-19 pandemic.
South Korea’s KOSPI on Friday rose 0.8 percent, bringing its weekly gain to 2.1 percent.
However, Hong Kong and Shanghai fell, with tech firms hurt by Alibaba Group Holding Ltd’s (阿里巴巴) donation of more than US$15 billion to charitable causes after Chinese President Xi Jinping (習近平) called for the rich to do more to tackle inequality.
Hong Kong’s Hang Seng Index lost 0.7 percent, but added 1.9 percent for the week. The Shanghai Composite Exchange on Friday fell 0.4 percent, but climbed 1.7 percent weekly.
Alibaba, which has been a key target of Beijing’s drive against high-flying tech firms, said it would put the money to “common prosperity” schemes.
However, the firm’s share price sank more than 3 percent in Hong Kong on Friday owing to worries about its bottom line.
Castor Pang (彭偉新) at Core Pacific Yamaichi International HK said: “The donation doesn’t guarantee that there will not be more regulations to target at Alibaba.”
“It’s more or less affecting the whole tech sector sentiment today,” Pang said.
Analysts said a speech by Xi on Thursday announcing plans for a new stock exchange in Beijing for small and medium-sized enterprises had suggested he remained supportive of the role of markets in the country’s development.
Despite the general advance on markets this week, fueled by a consensus that the global economy will continue to recover from the pandemic, there remains a sense of caution.
“Historically, September is a weak month for equities, particularly in the US, and some investor caution is natural given elevated valuation multiples and a challenging macro environment,” said Lewis Grant at Federated Hermes.
“The Delta variant continues to soften consumer confidence across the world. Concerns over parts shortages and supply chain frictions have not eased. Afghanistan reminds us how quickly geopolitical risks can appear, while Hurricane Ida demonstrates our vulnerability in the face of increasingly common extreme weather events,” Grant said.
He said Friday’s figures would be “likely to see a return to the ‘bad news is good news’ attitude, with a worse-than-expected slowdown in the US labor market likely to send stocks higher in anticipation of continued stimulus.”
Additional reporting by staff writer
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