By Ambar Warrick
Investing.com-- Most Asian markets saw choppy trade on Friday as sentiment remained frayed over a hawkish Federal Reserve, while Chinese stocks logged a strong rally on renewed speculation over the potential lifting of COVID restrictions.
China’s Shanghai Shenzhen CSI 300 blue-chip index rallied 3.4%, while the Shanghai Composite index jumped 2.5% as new rumors circulated on social media that Beijing was considering scaling back its strict zero-COVID policy.
Hong Kong stocks were also swept up in the buying, with the Hang Seng index rallying over 6%.
But Chinese authorities denied that they were considering the scaling back of COVID restrictions, especially as the country grapples with its worst outbreak since May. Rising infections have spurred new restrictions across several Chinese cities, including economic capital Shanghai.
Still, Chinese stocks were headed for their best week in over two years as investors bought into severely weakened markets on the expectations of a recovery. China’s blue-chip index was trading near a two-year low, while the Hang Seng bounced back from a 13-year low.
Broader Asian stocks were set to end the week muted after hawkish signals from the Federal Reserve rattled markets. Focus is now on U.S. nonfarm payrolls data, which is expected to provide more cues on the economy and potentially factor into the Fed’s coming rate hikes.
While the data is expected to show a mild decline in the jobs market, any signs of economic resilience give the Fed enough economic headroom to keep raising interest rates.
Japan’s Nikkei 225 index fell 1.7% in catch-up trade, after a holiday on Thursday. But data showed the country’s services sector grew at its fastest pace in four months in October, benefiting largely from the lifting of most COVID restrictions.
Australia’s S&P/ASX 200 index rose 0.5%, taking some support from speculation over China’s reopening. Major Australian miners greatly depend on the country as a commodity market.
India’s Nifty 50 index was flat, as traders awaited fresh cues from an unscheduled policy meeting by the Reserve Bank. The bank is set to outline more measures to curb runaway inflation.
Philippine stocks led losses across Southeast Asia with a 1% drop, after data showed inflation grew more than expected in October. The central bank also vowed to keep raising interest rates to rein in inflation.