MSCI’s broadest index of Asia-Pacific shares outside Japan added 1% led by a 2% gain in South Korea’s Kospi and a 1% gain for Hong Kong’s Hang Seng
Asian stocks made their biggest gains in a month on Thursday, while the dollar took a breather and bond markets stabilised as investors stepped back to evaluate the interest rate outlook.
Oil found support following its sharpest decline in two-and-a-half months on demand concerns.
Analysts do not anticipate dramatic new sanctions on oil from Iran, which comprises around 3% of global output.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 1% led by a 2% gain in South Korea’s Kospi and a 1% gain for Hong Kong’s Hang Seng.
Japan’s Nikkei added 0.3%, though its decline of 3.6% for the week has it eyeing its largest weekly drop since 2022.
S&P 500 futures jumped 0.4%, Nasdaq 100 futures gained 0.5%, FTSE futures advanced 0.3% while European futures were flat.
The dollar has dropped from recent highs and news of an unusual trilateral agreement between the U.S., Japan and Korea to consult closely on foreign exchange left the door open to intervention to slow any further dollar gains in Asia.
U.S. short-term interest rate expectations were little changed but selling of longer-dated bonds abated, and Asia’s bond markets rose on Thursday. Ten-year Japanese government bond yields dropped 2 bps to 0.86%.
Ten-year Treasury yields dropped 1.6 bps to 4.569% and two-year Treasury yields, which hit 5% on Thursday, were at 4.92%.
I believe drops in yields and the dollar are small pullbacks from extended moves, said Anshul Sidher, global head of markets at ANZ in Singapore, adding traders are closely watching bonds and the dollar to drive the mood.
I would expect oil to be range bound subject to Middle East escalations from where we are now, he added.
Taiwanese chipmaker TSMC turned in a positive surprise, beating market estimates with a 9% increase in profit as it rides a wave of AI led demand. It expects business to pick up in the second half and the result contrasted with Wednesday’s disappointing earnings from chipmaking supplier ASML.
