This post was originally published on this site
Japanese stocks also rose comparatively less than their peers, with focus squarely on the conclusion of a Bank of Japan meeting later in the day. Softer-than-expected Tokyo inflation data added to the uncertainty.
Regional markets tracked gains in U.S. stock index futures, which rose sharply after stronger-than-expected earnings from tech giants Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc (NASDAQ:GOOGL). The two stocks surged in aftermarket trade, with Alphabet hitting a record high.
Gains in U.S. tech stocks largely overshadowed a weak overnight close on Wall Street, following softer-than-expected gross domestic product data and a higher GDP price index. Focus was now on PCE price index data- the Federal Reserve’s preferred inflation gauge- which is due later in the day.
Japan’s Nikkei 225 index added 0.4%, while the broader TOPIX rose 0.2%.
Sentiment towards Japan was largely constrained by uncertainty before the conclusion of a BOJ meeting. While the central bank is widely expected to keep rates on hold, investors are uncertain whether it will offer up hawkish signals in the face of a weakening yen.
Softer-than-expected consumer price index inflation data from Tokyo further added to the uncertainty. Inflation in Japan’s capital slid below the BOJ’s 2% annual target in April, giving the central bank less headroom to hike interest rates further.
Still, gains in tech stocks supported Japanese benchmark indexes.
Tech-heavy Asian bourses were the best performers on Friday. South Korea’s KOSPI rose 1%, while Hong Kong’s Hang Seng index added 1.5%.
The Hang Seng also hit a five-month high on gains in oil and gas giant CNOOC Ltd (HK:0883), after the firm clocked stronger-than-expected quarterly earnings.
Positive earnings from the U.S. tech giants fueled hopes that demand for artificial intelligence- which was a key driver of the earnings beat- will continue to buoy tech valuations in the coming quarters. Gains in tech also saw China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rise 0.8% and 0.6%, respectively.
Futures for India’s Nifty 50 index pointed to a positive open, with local tech stocks also set to track broader gains.
Australia’s ASX 200 was the sole underperformer for the day, falling 1.3% in catch-up trade after a holiday on Thursday.
Australian stocks were also spooked by data showing an increase in producer price index inflation over the first quarter, which heralds higher-for-longer interest rates in the country.
