Asia-Pacific markets are mixed following Wall Street rally

Key Points

• Shares in Asia-Pacific traded mixed Friday after a rally on Wall Street.
• U.S. stocks advanced overnight despite the latest GDP report showing a second-straight quarter of contraction.
• Thailand’s market is closed for a holiday Friday.

SINGAPORE — Shares in Asia-Pacific traded mixed Friday after a rally on Wall Street. That followed a negative U.S. gross domestic product report, which suggests the Fed would be less aggressive in its tightening cycle.

In Japan, the Nikkei 225 gained 0.32% while the Topix index was about flat.

The country’s industrial output jumped 8.9% in June from the previous month, the ministry of economy, trade and industry said Friday. The print surprised to the upside after falling in May.

South Korea’s Kospi rose 0.85% and the Kosdaq advanced 0.9%.

The S&P/ASX 200 in Australia was up 0.78%.

TICKER	COMPANY	NAME	PRICE	CHANGE	%CHANGE
.N225	Nikkei 225 Index	*NIKKEI	27944.55	129.07	0.46
.HSI	Hang Seng Index	*HSI	20339.74	-282.94	-1.37
.AXJO	S&P/ASX 200	*ASX 200	6949.3	59.6	0.87
.SSEC	Shanghai	*SHANGHAI	3267.12	-15.46	-0.47
.KS11	KOSPI Index	*KOSPI	2451.67	16.4	0.67
.FTFCNBCA	CNBC 100 ASIA IDX	*CNBC 100	8161.54	2.17	0.03

Singapore’s United Overseas Bank reported net profit of 1.1 billion Singapore dollars ($797 million) for the second quarter, up 11% from a year ago.

“Net interest income grew 18% year on year led by strong margin improvement and healthy loan growth,’” the company said in a statement.

UOB’s shares fell 0.32%, compared with a 0.55% rise on the Straits Times Index.

Thailand’s market is closed for a holiday Friday.

MSCI’s broadest index of Asia-Pacific shares outside of Japan gained 0.28%.

Greater China markets

Hong Kong’s Hang Seng index slipped 0.34%. In mainland China, the Shanghai Composite was fractionally lower and the Shenzhen Component dipped 0.26%.

Chinese leaders on Thursday signaled Beijing is unlikely to try to boost the economy, and downplayed the country’s GDP target of “around 5.5%.”

“This hints that the government is not going to overly spend on infrastructure projects to achieve that target. Our view is that this is not such a bad thing,” ING said in a Friday note.

“This would give more room for the central government to solve the problem of uncompleted construction projects,” the authors added.

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Additionally, Beijing seems committed to its zero-Covid policy.

“It appears to us that any change in the zero-Covid policy will only happen when authorities are convinced that mutations are less virulent and vaccines/medicines are proven to be more effective,” wrote ANZ Research’s Betty Wang, a senior China economist, and Zhaopeng Xing, a senior China strategist.

U.S. moves

Major U.S. indexes rallied at least 1% each overnight.

The Dow Jones Industrial Average jumped 332.04 points, or 1%, to 32,529.63.The S&P 500 rose 1.2% to 4,072.43, and the Nasdaq Composite added nearly 1.1% to 12,162.59.

U.S. futures rose further after tech companies like Apple and Amazon reported strong earnings.

Those moves came despite the U.S. Bureau of Economic Analysis reporting GDP fell 0.9% at an annualized pace for the April-to-June quarter, according to the advance estimate. GDP slipped 1.6% in the first quarter of the year.

While that is the second-straight negative GDP report, official declarations on whether the U.S. is in a recession come from the National Bureau of Economic Research. That determination could take months or even longer.

Currencies and oil

The U.S. Dollar Index, which tracks the greenback against a basket of its peers, was at 106.153.

The The Japanesse Yen traded at 134.51 per dollar, strengthening from earlier in the week. The Australian Dollar is trying to reach the $0.7 level and was last at $0.6995.

Oil futures gained. U.S. Crude was up 1.27% at $97.64 per barrel, while Brent Crude was 0.83% higher at $108.03 per barrel.

Source : CNBC