Asia report: Most markets follow Wall Street higher

29th Oct 2024 09:00

(Sharecast News) - Asia-Pacific markets mostly rose on Tuesday, mirroring Wall Street's gains as investor optimism about upcoming major tech earnings helped lift sentiment across the region.

Patrick Munnelly at TickMill described Tuesday's Asian trading as "erratic", as investors readied themselves for three days of tech mega-cap earnings reports on Wall Street, beginning with Google parent Alphabet later in the global day.

"With the JOLTS job openings report, one of the Federal Reserve's favoured employment indicators, due on Tuesday ahead of the much-awaited monthly non-farm payrolls data on Friday, the dollar was trading close to a three-month high.

"After reaching three-month highs, US Treasury yields decreased."

Munnelly added that after plunging to a three-month low on Monday, the yen recovered earlier on Tuesday as the future for Japanese fiscal and monetary policy was clouded by the coalition government's defeat in the weekend general election.

"Prime minister Shigeru Ishiba's Liberal Democratic Party and its junior partner Komeito lost their parliamentary majority in Japan, which could result in higher fiscal spending and make it more difficult for the Bank of Japan to normalise interest rates.

"As a result, a period of negotiations to form a coalition government is anticipated.

"Crude rose a little after plunging on Monday amid indications that the Middle East conflict would not intensify, as Israel refrained from attacking Iran's nuclear and oil installations in a weekend retaliatory strike."

Most markets manage gains in busy week for earnings

In Japan, the Nikkei 225 climbed 0.77% to close at 38,903.68, continuing its upward momentum from the previous session, while the broader Topix index advanced by 0.91%.

Notable gains were seen among industrial players such as M3, which surged 6.48%, Furukawa Electric, up 6.2%, and IHI Corporation, which gained 5.4%.

China's markets moved in the opposite direction, with the Shanghai Composite dropping 1.08% to 3,286.41, and the Shenzhen Component shedding 1.33%.

Leading the declines were Cashway Technology, which fell 9.99%, and Far East Smarter Energy, down 9.97%, as risk appetite appeared limited in China.

Hong Kong's Hang Seng Index rose 0.49% to 20,701.14, buoyed by HSBC Holdings, which surged 3.69% following a strong earnings report.

HSBC beat analysts' expectations with a 10% increase in pre-tax profit to $8.5bn, underpinned by revenue growth amid a restructuring to balance its operations across China and Western markets.

Sunny Optical and BYD Electronic also saw gains in the special administrative region, rising 3.56% and 3.11%, respectively.

South Korea's Kospi 100 saw a modest increase of 0.2% to 2,626.68, led by Korea Zinc and Hanmi Science, which jumped 18.6% and 18.78%, respectively, suggesting investor enthusiasm in the materials and healthcare sectors.

Australia's S&P/ASX 200 gained 0.34% to end at 8,249.20, with strong performances from ZIP Co, up 11.83%, and Premier Investments, which climbed 9.91%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 edged up 0.09% to 12,783.36, led by a 15.33% surge in Serko as the market showed interest in technology and property stocks.

In currency markets, the dollar was last up 0.07% on the yen, trading at JPY 153.39, as it added 0.12% against the Aussie to AUD 1.5208 and eked out gains of 0.01% on the Kiwi, changing hands at NZD 1.6722.

Oil prices were in the green, with Brent crude futures last up 0.56% on ICE $71.82, while the NYMEX quote for West Texas Intermediate was ahead 0.61% at $67.79.

Jobless rate falls slightly in Japan

In economic news, Japan's jobless rate fell slightly to 2.4% in September from 2.5% in August, outperforming economists' expectations.

The job-to-applicant ratio ticked up to 1.24 from 1.23, though it remains well below the pre-pandemic average of 1.6 according to Moody's.

Moody's cautioned that Japan's weak domestic economy and low external demand could continue to weigh on employment prospects in the coming months.

Meanwhile, opposition leader Yuichiro Tamaki of the Democratic Party for the People urged the Bank of Japan to maintain its current monetary stance.

According to CNBC, Tamaki argued that substantial policy adjustments should be deferred until real wages show a significant increase, ideally exceeding 4% by next year's spring wage negotiations.

His remarks preceded the Bank of Japan's policy meeting later in the week, where the central bank was widely expected to keep its interest rate steady at 0.25% according to Reuters polling.

Reporting by Josh White for Sharecast.com.