Tech stocks have climbed in Asia, following US peers higher, while Chinese property stocks rallied following a surprise interest payment by debt-ridden property developer China Evergrande Group.
Meanwhile, cyclical stocks dragged on Friday amid worries that central bankers will need to tighten monetary policy into slowing growth in order to tackle persistent inflation.
Regional bond yields rose with those on US Treasuries, where the market priced in higher inflation by narrowing the spread between short- and long-term yields, and pushing break-even rates to the highest since 2012.
The US dollar held gains from overnight – when it rose the most since the start of last week against major peers – as better jobs and housing data boosted the case for a faster tapering of Federal Reserve stimulus and earlier interest rate hikes.
Japan’s Nikkei rose 0.7 per cent led by technology shares, while energy shares were the biggest drag. The broader Topix added 0.3 per cent, with a 0.6 per cent jump in the Topix growth index handily outpacing a 0.1 per cent advance for the value index.
Chinese blue chips gained 0.3 per cent, with the CSI300 Real Estate Index rising 2.5 per cent. Hong Kong’s Hang Seng rose 0.4 per cent, as an index tracking Hong Kong-listed mainland developers rallied 4.3 per cent.
Australia’s benchmark index slipped 0.2 per cent as commodity-linked shares fell.
China Evergrande Group wired funds to a trustee account on Thursday for a dollar bond interest payment due on September 23, a source told Reuters on Friday, days before a deadline that would have plunged the embattled developer into formal default. The stock jumped 5.4 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1 per cent.
Meanwhile, S&P 500 E-minis futures slipped 0.1 per cent after the cash index posted a record closing high overnight, led by surging tech shares.
The S&P 500 added 0.3 per cent, while the Nasdaq Composite rallied 0.6 per cent, although the Dow Jones Industrial Average edged slightly lower.
Next week, almost all the so-called FAANG giants report earnings: Facebook, Apple, Amazon, and Google-owner Alphabet. Netflix posted its results on October19, and for the quarter that ended in September, diluted earnings-per-share came in at $US3.19, beating analyst expectations of $US2.57.
Oil prices resumed their climb on Friday, after dropping back from multi-year highs reached earlier in the week, amid continued tightness in US supply.
Brent crude added 0.2 per cent to $US84.77, while US West Texas Intermediate crude rose 0.2 per cent to $US82.65.
The number of Americans filing new claims for unemployment benefits dropped last week to a 19-month low, data showed overnight, pointing to a tighter labor market.
Yields on benchmark 10-year Treasury notes were at 1.6922 per cent, holding close to a five-month high of 1.7050 per cent reached overnight. Two-year yields at 0.4484 per cent were also close to the overnight high of 0.4560 per cent, a level not seen since March of last year.
The dollar index, which gauges the greenback against six major rivals, was largely flat at 93.730 on Friday, maintaining the previous session’s 0.2 per cent gain.
The Fed has signalled it could start to taper stimulus as soon as next month, with rate hikes following late next year.
Fed Chair Jerome Powell speaks later on Friday in a panel discussion.
The Fort News