(Bloomberg) — Most Asian equity benchmarks rose as a rebound in US shares extended into after-hours trading after a set of bumper results from tech giants.
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Stocks in Japan, Australia and South Korea edged higher, along with those in Hong Kong. Futures for US equities climbed in Asia after both the S&P 500 Index and the tech-heavy Nasdaq 100 Index rose over 1% on Thursday.
Japan’s Aozora Bank Ltd. fell as much as 19%, compounding the heavy selling seen on Thursday due to the firm’s exposure to US commercial property. The lender’s share price is down almost a third this week.
“Oversold technicals sparking automatic buying and a positive after-hours surge in US markets” are driving the gains in Asian equities, said Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore. “Algorithmic traders, programmed to react to such technical signals, are likely driving the initial upswing. This buying frenzy is being further amplified by short covering.”
Treasuries were steady in Asian trading after an advance Thursday that dragged the 10-year yield three basis points lower. An index of the dollar slipped, while the yen was little changed.
The moves come ahead of US nonfarm payrolls data due Friday which are expected to show a slowdown in new jobs added to the economy. Separate data released Thursday pointed to an increase in jobless claims, which suggested a softening in the labor market.
Global stocks are heading for a second week of gains as traders continue to speculate that the Federal Reserve will cut interest rates in the coming months. A vow by Chinese authorities to maintain the strength of government spending is also helping sentiment.
The Fed meeting “has given a very strong signal to the market that rates have peaked and cuts are coming,” Anitza Nip, head of Asia fixed income research at Union Bancaire Privee, told Bloomberg TV. “Our view is May or June they will start cutting and they will cut four times this year.”
The rally in Treasuries and fresh demand for gold, that pushed the price of the precious metal higher for a fourth session on Thursday, signaled further angst over US regional banks. An index of US regional financials is on pace for its worst week since May last year, during the fallout of the banking crisis. The declines came as Citizens Financial Group Inc.’s chief executive said the issues that led to the collapse of several lenders last year are largely in the past.
Elsewhere, Japanese banking giant Mizuho Financial Group is likely to report a decline in third-quarter net income when it releases earnings today.
Meta Platforms Inc rose as much as 15% in post-market trading on strong earnings. The company announced its first-ever quarterly dividend of 50 cents a share and authorized an additional $50 billion in buybacks. Amazon.com Inc. shares advanced around 9% after the bell following results that showed strong sales. The momentum outweighed a decline in Apple Inc, which unveiled a deepening slump in China despite overall sales growing.
“Some of the earnings have been great,” Max Wasserman, founder and senior portfolio manager for Miramar Capital, said on Bloomberg TV. “You’re hearing good numbers from Meta, decent numbers from Amazon — the one caveat is you’re not hearing great numbers from Apple.”
The gains for US stocks Thursday marked a rebound from the prior session, when shares fell after the Federal Reserve pushed back against the prospect of a March rate cut.
Goldman Sachs Group Inc., Bank of America Corp. and Barclays Plc — among the last Wall Street holdouts expecting the Fed to start lowering their benchmark rate as soon as March — have pushed back their forecasts for cuts after the conclusion of the central bank’s policy meeting Wednesday.
Swap contracts that predict the outcome of future Fed meetings are priced for about 150 basis points of easing this year, with the first move fully priced in for May.
Oil halted a two-day drop. Bloomberg News reported negotiations are advancing for a deal to pause the Israel-Hamas war and free civilian hostages.
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.6% as of 12:03 p.m. Tokyo time
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Nasdaq 100 futures rose 1.1%
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Japan’s Topix rose 0.6%
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Australia’s S&P/ASX 200 rose 1.5%
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Hong Kong’s Hang Seng rose 1.5%
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The Shanghai Composite was little changed
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Euro Stoxx 50 futures rose 1%
Currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro was little changed at $1.0877
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The Japanese yen was little changed at 146.35 per dollar
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The offshore yuan was little changed at 7.1889 per dollar
Cryptocurrencies
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Bitcoin was little changed at $43,073.72
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Ether fell 0.1% to $2,301.25
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Ishika Mookerjee.
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