Asian Equities Look To End Week Higher On Tech Rally

Asian markets are rallying today, buoyed by optimism that the US economy will avoid a recession. Almost all major stock benchmarks across the region are up, with a regional gauge poised for its best weekly performance in over a year. Japanese equities are leading the gains, benefiting from a weaker yen which has helped exporters, the currency has fallen significantly against the dollar, easing concerns of a carry trade unwind. The Hong Kong equities saw gains, supported by Alibaba and JD.com posting better-than-expected profits. Meanwhile, China’s central bank pledged more measures to support economic growth, although without drastic interventions. Overall, the Asian markets are extending a recovery from last week’s volatility, driven by positive US economic data and strong performances in tech and export-oriented stocks.

• Japan's benchmark indices are all trading 2-4% higher today, banks again lead the way higher. The rally was fueled by strong U.S. economic data, including better-than-expected retail sales, which eased concerns about a potential recession. The weakening yen also provided a boost, particularly for export-oriented sectors like machinery and electronics. Investor sentiment was further bolstered by signs of stability in the U.S. market and positive reactions to recent domestic corporate earnings. The Nikkei is on track for its best week since April 2020, currently trading 2.90% higher, while the TOPIX is 2.5% higher.
• South Korean stocks are also higher today with the KOSPI up 2%, while the KOSDAQ is lagging although still 1.20% higher, the moves have been driven by eased U.S. recession concerns and strong gains across major sectors. Big-cap stocks led the rally, as Samsung Electronics advanced 2.46%, while SK hynix surged 6.16%, while autos have also jumped between 2-5%. Foreign investors played a key role, injecting $455 million into local equities so far today, particularly in tech stocks.
• Similar to SK, Taiwan's equity market is higher with TSMC contributing the most to the index gains, up 2%.
• Australian equities are higher, although underperforming other region markets. Financials & Materials are the top performers. Earlier, RBA gov Bullock ruled out rate cuts this year, after concerns that inflation is falling very slow. The ASX200 is 1.25% higher today. New Zealand equities are 0.30% today.
• In the Asia EM space, all markets are higher with Indonesia's JCI up 0.40%, Singapore's Strait Times 1.15% higher, Malaysia's KLCI up 0.50%, Philippine's PSEi is up 1.70% higher.