HONG KONG — Asian markets rose on Friday after a strong performance on Wall Street, with Hong Kong leading as better-than-expected earnings reports from tech titans Alibaba and Baidu lifted their shares.
The positive mood put the region on track to end the week on a healthy note, and came after Federal Reserve minutes indicated the US central bank may take a break from raising interest rates. interest if inflation showed signs of slowing down later in the year.
Yet confidence in trading floors remains high due to a series of crises, including soaring prices, tightening monetary policy, Covid lockdowns in China and war in Ukraine.
Investors were in a buying mood on Friday as Hong Kong jumped more than 3% with market heavyweight Alibaba piling up more than 12% and search engine Baidu rising more than 15%.
Both companies posted better-than-expected sales growth in the January-March quarter, allaying fears about the impact of Covid and inflation on their results.
Hong Kong’s tech index jumped 4%, with other giants also enjoying buying interest with JD.com and Meituan up more than 5%.
The reports were much-needed good news from the world’s second-largest economy, which is battered by lockdowns in major cities as leaders refuse to back down from their zero-Covid strategy.
Ronald Keung, at Goldman Sachs, issued an optimistic note.
“We expect the second quarter to mark the trough in the growth of our businesses,” he told Bloomberg TV.
“Based on Covid policies and government policies to help pull back consumer confidence, we expect easier comparables for Chinese tech companies, especially heading into the September and December quarters. “
Shanghai, Tokyo, Seoul, Sydney, Singapore, Taipei, Manila, Jakarta and Wellington were also up sharply.
Strong Retail Revenues
Asian investors took the lead on Wall Street, where the three major indices enjoyed a second day of gains after strong profits from retailers including discount company Dollar Tree, department store Macy’s and the more upmarket Williams-Sonoma.
The readings bolstered hopes that consumers were more resilient to inflation and rising rates, and came as a survey by the Federal Reserve Bank of New York showed U.S. shoppers expected in much to the fact that the upward price pressures are temporary, with the gains diminishing in the long run.
Earlier in the week, markets rose as minutes from the Fed’s May meeting suggested policymakers could temper their rate hike campaign later in the year if inflation appeared to stabilize.
“We can see a bit more stability here because we’ve already repriced stocks so much,” said Anastasia Amoroso of iCapital.
“I don’t know how far this upward move is going to go because I don’t think the fundamentals really justify it in the short term. Over the next three to six months, the market environment will remain limited.”
Key figures around 02:30 GMT
Tokyo – Nikkei 225: UP 0.6% to 26,772.84 (pause)
Hong Kong – Hang Seng Index: UP 3.1% to 20,733.59
Shanghai – Composite: UP 0.5% to 3,139.18
Euro/dollar: UP at $1.0757 vs. $1.0732 on Thursday
Pound/dollar: UP to $1.2655 from $1.2607
Euro/pound: DOWN to 85.00 pence from 85.11 pence
Dollar/yen: FALL to 126.70 yen against 127.05 yen
North Sea Brent: FLAT at $117.38 a barrel
West Texas Intermediate: DOWN 0.1% to $114.02 a barrel
New York – Dow: UP 1.6% to 32,637.19 (closing)
London – FTSE 100: UP 0.6% to 7,564.92 (closing)
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