Asian Stocks Gain on China Recovery, Weaker Dollar: Markets Wrap

Asian equities climbed, aided by signs of a stabilization in China’s economy and a retreat in the dollar.

Shares in Hong Kong and Australia advanced following data that showed China recorded the highest retail sales growth in eight months. Japanese benchmarks gained about 0.8%, supported by weakness in the yen. US contracts slipped.

A gauge of the dollar halted a five-day gain that was helped by Federal Reserve Chair Jerome Powell’s comments that the central bank will be in no rush to cut interest rates. US two-year yields were little changed.

“We think a December rate cut is in the cards and we think there will be at least two cuts next year,” Salman Niaz, head of global fixed income for AC ex-Japan at Goldman Sachs Asset Management, said on Bloomberg Television.

“The strength of the dollar has obviously taken away some of the returns from emerging markets local currency bonds, but we think the more attractive opportunity at this point is in the hard currency aspect of emerging markets,” Niaz said, referring to dollar-denominated debt.

Friday’s action gives a welcome respite to emerging market assets after they suffered for most of the week amid developments on US President-elect Donald Trump’s cabinet picks and shifting interest-rate forecasts. A gauge of emerging markets equities is still on pace for its worst week since June 2022, while a separate index of emerging markets currencies is close to erasing its gains for the year. 

South Korean shares fell on Friday, weighed down by battery makers on news that Donald Trump may eliminate a tax credit for electric vehicle purchases. The won is in focus after the country was added to the US Treasury’s “monitoring list” for foreign-exchange practices.

Among key earnings, Alibaba Group Holding Ltd. reports later Friday after another Chinese consumption bellwether JD.com Inc posted a moderate expansion in revenue. 

Elsewhere, data set for release in the region includes gross-domestic product for Malaysia and Hong Kong. Markets are closed in India.

In commodities, oil headed for a weekly drop, weighed down by the impact of a stronger dollar and concerns the global market will flip to a glut next year. Gold held near a two-month low. 

Data earlier Thursday in the US showed producer prices exceeded consensus forecasts. Jobless claims were below expectations and touched the lowest level since May.

Several policymakers have urged a cautious approach to further rate cuts in comments this week, in light of a strong economy, lingering inflation concerns and broad uncertainty. Their comments come at a time when the equity market is showing signs of fatigue following a post-election surge that spurred calls for a pause, with several measures highlighting “stretched” trader optimism.

In the US, the S&P 500 dropped 0.6%, while the Nasdaq 100 slipped 0.7%. Automakers like Tesla Inc. and Rivian Automotive Inc. slumped as Reuters reported US President-elect Trump plans to eliminate the $7,500 consumer tax credit for electric-vehicle purchases. Walt Disney Co. jumped on a profit beat. 

Some of the main moves in markets:

This story was produced with the assistance of Bloomberg Automation.

This article was generated from an automated news agency feed without modifications to text.