Asian shares track Wall St gains but China worries weigh

By Alun John

HONG KONG (Reuters) – Asian shares edged up on Friday, building on Wall Street’s positive lead after a set of strong U.S. corporate earnings, although worries about the Chinese economy capped gains.

Oil prices were at multi-year highs, a drag on growth in energy-importing markets in north Asia, but good news for some energy-exporting markets in Southeast Asia.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.07%, and was set for a 1.7% weekly gain, which would be its best weekly performance since early September, while Japan’s Nikkei surged 1.81%, led by tech stocks.

Index futures suggested the rally was set to follow into European markets. Pan-region Euro Stoxx 50 futures were up 0.36% and FTSE futures gained 0.31%. U.S. stock futures gained 0.3%.

Analysts largely attributed the gains in Asia to the U.S. rally.

Kenny Ng, a securities strategist at Everbright Sun Hung Kai in Hong Kong, said the local benchmark’s 1.06% rise – among the biggest in Asia on Friday – was due to overnight gains in U.S. stocks, as well as positive news from mainland China for Hong Kong-listed new energy vehicle and education companies.

Japan’s Nikkei rose 1.56%, with analysts also pointing to gains on Wall Street boosting local tech names.

U.S. shares powered ahead overnight after data showed a fall in new claims for unemployment benefits, lower-than-expected factory gate price inflation and forecast-beating results for the four largest U.S. consumer banks.

“The stagflation narrative had some cold water thrown over it,” said Kyle Rodda an analyst at IG markets.

Chinese shares rose more cautiously than elsewhere with blue chips up 0.43% and the Shanghai Composite index gaining 0.46%, as investors balanced expectations of policy easing against worries of a slowing economy, ahead of quarterly GDP data due Monday.

“We expect GDP growth to slow to 4.6% year-on-year in the third quarter from 5.6% previously, in view of persistent weakness in consumption and services amid repeated COVID outbreaks, and the fading of the low year-earlier base,” said Barclays analysts in a note.

In currency markets, the dollar rose again to a near three- year high on the yen on Friday with one dollar buying 114.07 yen, the most since late 2018.

The dollar index, which measures the greenback against a basket of currencies, was marginally lower on the day, at 93.97 and set for its first weekly decline versus major peers since the start of last month, having lost a little ground on sterling and the euro.

The yield on benchmark 10-year Treasury notes was 1.5301%, slightly higher on the day, after trending downwards this week from Tuesday’s four-month high of 1.631%.

U.S. crude gained 0.82% to $81.98 a barrel, back near Monday’s seven-year high of $82.18. Brent crude rose 0.9% to $84.78 per barrel, around its three-year high hit Monday. [O/R]

Bitcoin also hit a six-month high of $60,000 on Friday, approaching the record hit in April, as traders became increasingly confident U.S. regulators would approve the launch of an exchange-traded fund based on its futures contracts.

(Reporting by Alun John; Editing by Muralikumar Anantharaman and Sam Holmes)

By Alun John

HONG KONG (Reuters) – Asian shares edged up on Friday, building on Wall Street’s positive lead after a set of strong U.S. corporate earnings, although worries about the Chinese economy capped gains.

Oil prices were at multi-year highs, a drag on growth in energy-importing markets in north Asia, but good news for some energy-exporting markets in Southeast Asia.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.07%, and was set for a 1.7% weekly gain, which would be its best weekly performance since early September, while Japan’s Nikkei surged 1.81%, led by tech stocks.

Index futures suggested the rally was set to follow into European markets. Pan-region Euro Stoxx 50 futures were up 0.36% and FTSE futures gained 0.31%. U.S. stock futures gained 0.3%.

Analysts largely attributed the gains in Asia to the U.S. rally.

Kenny Ng, a securities strategist at Everbright Sun Hung Kai in Hong Kong, said the local benchmark’s 1.06% rise – among the biggest in Asia on Friday – was due to overnight gains in U.S. stocks, as well as positive news from mainland China for Hong Kong-listed new energy vehicle and education companies.

Japan’s Nikkei rose 1.56%, with analysts also pointing to gains on Wall Street boosting local tech names.

U.S. shares powered ahead overnight after data showed a fall in new claims for unemployment benefits, lower-than-expected factory gate price inflation and forecast-beating results for the four largest U.S. consumer banks.

“The stagflation narrative had some cold water thrown over it,” said Kyle Rodda an analyst at IG markets.

Chinese shares rose more cautiously than elsewhere with blue chips up 0.43% and the Shanghai Composite index gaining 0.46%, as investors balanced expectations of policy easing against worries of a slowing economy, ahead of quarterly GDP data due Monday.

“We expect GDP growth to slow to 4.6% year-on-year in the third quarter from 5.6% previously, in view of persistent weakness in consumption and services amid repeated COVID outbreaks, and the fading of the low year-earlier base,” said Barclays analysts in a note.

In currency markets, the dollar rose again to a near three- year high on the yen on Friday with one dollar buying 114.07 yen, the most since late 2018.

The dollar index, which measures the greenback against a basket of currencies, was marginally lower on the day, at 93.97 and set for its first weekly decline versus major peers since the start of last month, having lost a little ground on sterling and the euro.

The yield on benchmark 10-year Treasury notes was 1.5301%, slightly higher on the day, after trending downwards this week from Tuesday’s four-month high of 1.631%.

U.S. crude gained 0.82% to $81.98 a barrel, back near Monday’s seven-year high of $82.18. Brent crude rose 0.9% to $84.78 per barrel, around its three-year high hit Monday. [O/R]

Bitcoin also hit a six-month high of $60,000 on Friday, approaching the record hit in April, as traders became increasingly confident U.S. regulators would approve the launch of an exchange-traded fund based on its futures contracts.

(Reporting by Alun John; Editing by Muralikumar Anantharaman and Sam Holmes)