Equities in Asia retreated on Friday as investors analyzed economic data for insights into global interest-rate trends following another record-breaking day for US stocks. Although Australian and Korean stocks declined, Japanese stocks experienced slight gains, while Hong Kong and China saw a lower opening. Thursday saw a significant rally for a gauge of the region’s shares, reaching its highest level in nearly two years.
In early Asian trading, US stock futures rose after the S&P 500 index climbed 0.3% to a new peak on Thursday, its 20th of the year, with industrial and banking stocks leading the way. Notably, Reddit Inc. shares surged 48% on their debut. Market analyst Tony Sycamore noted that several central banks, including the Reserve Bank of Australia and the Federal Reserve, have adopted a dovish stance, prioritizing growth over inflation concerns, potentially leading to reinforced expectations of rate cuts and secured growth prospects.
While some US tech stocks faltered due to increased regulatory scrutiny, the overall economic data in the US suggested a resilient economy that could prompt the Fed to adjust its rate-reduction forecasts. The Bank of Japan’s interest rate hike since 2007 raised speculation about potential future increases, as the yen remained stable and the onshore yuan weakened to its lowest level in four months. Meanwhile, Societe Generale SA raised its S&P 500 year-end forecast to 5,500, showcasing a strong belief in the ongoing resilience and rationality of US market optimism.