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Asian stocks rise as China optimism helps ease pre-payrolls angst

Published 01/09/2023, 05:00
Updated 01/09/2023, 05:00
©  Reuters Most Asian stocks rose on Friday as unexpectedly positive Chinese factory activity data and more stimulus measures in the country helped improve sentiment before a closely watched U.S. jobs report. 

China rolled out more measures to support its beleaguered housing market, while also cutting foreign exchange reserve requirements for local banks to release more dollars and buoy the yuan.

The move, which came as a private survey showed Chinese factory activity unexpectedly grew in August, helped spur some optimism over Asia’s largest economy, which is otherwise struggling with a sluggish post-COVID economic recovery. 

The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.6% and 0.3%, respectively. Trading in Hong Kong was suspended on account of super Typhoon Saola, which is expected to make landfall in China’s Guangdong province later in the day. 

Asian stocks buoyed by China optimism 

Broader Asian stocks rose on the prospect of an economic recovery in the region’s biggest trading partner. 

Japan’s Nikkei 225 added 0.5% and the broader TOPIX rose 0.9%, shrugging off weaker-than-expected capital spending and manufacturing activity data. 

South Korea’s KOSPI edged slightly higher, as data showed some improvement in the country’s imports and exports.

Indonesian stocks rose 0.3% on softer-than-expected inflation data, which pointed to a less hawkish Bank Indonesia.

On the other hand, Australia’s ASX 200 fell 0.4%, weighed by a batch of weak earnings, as well as softer-than-expected home loans data.

Indian stocks eye weak open as Adani woes offset strong GDP data

Futures for India’s Nifty 50 index pointed to a weak open after media reports outlined more allegations of stock price manipulation against major conglomerate Adani Group  (NS:ADEL). 

A report published by the Organized Crime and Corruption Reporting Project, a global network of investigative journalists, alleged that the firm consistently bought its own shares off open markets through offshore entities, with the intent to boost its own share price. 

Shares of companies under the firm slumped on Thursday, and are likely to see extended losses on Friday.

Concerns over Adani largely offset a stronger-than-expected GDP reading, which showed that the Indian economy grew 7.8% in the June quarter. 

Nonfarm payrolls in focus

Focus is now squarely on key U.S. nonfarm payrolls data for August, due later in the day. Any signs of resilience in the jobs market gives the Federal Reserve more headroom to keep raising interest rates- a scenario that bodes poorly for Asian markets. 

While data released this week showed that the U.S. economy was cooling, strength in consumer spending and the labor market is expected to keep inflation sticky and the Fed hawkish. 

Most Asian markets were still nursing steep losses for August as fears of rising U.S. rates and worsening Chinese growth battered sentiment.

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