Tokyo, Asian shares were mostly higher on Friday following a broad rally on Wall Street, but Hong Kong’s benchmark sank more than 2%, reports AP.
Investors appear to have grown more convinced that the Federal Reserve may temper its aggressive interest rate hikes aimed at taming inflation after the Commerce Department reported the US economy contracted at a 0.9% annual pace in the last quarter. That followed a 1.6% year-on-year drop in the first quarter.
Hong Kong’s Hang Seng index dropped 2.3% to 20,148.90 and the Shanghai Composite index declined 0.7% to 3,258.86 after China’s leaders acknowledged the struggling economy won’t hit its official 5.5% growth target this year.
Japan’s benchmark Nikkei 225 lost 0.3% to 27,750.17, while Australia’s S&P/ASX 200 gained 0.8% to 6,947.30. South Korea’s Kospi added 0.4% to 2,446.22.
Japanese government data showed factory output in June jumped 8.9% from the previous month, marking the first rise in three months. The recent easing of pandemic lockdowns in China has helped boost Japanese production.
On Thursday, the S&P 500 rose 1.2% to 4,072.43, while the Dow added 1% to close at 32,529.63. The Nasdaq gained 1.1% to 12,162.59. The Russell 2000 rose 1.3% to 1,873.03.
Consecutive quarters of falling GDP are an informal, though not definitive, indicator of what economists call a technical recession.
The GDP report signaled weakness across the economy. Consumer spending slowed as Americans bought fewer goods. Business investment fell. Inventories tumbled as businesses slowed their restocking of shelves, shedding 2 percentage points from GDP.
The Federal Reserve has made slowing the U.S. economy to tame the highest inflation in 40 years its goal by raising interest rates, most recently on Wednesday. The latest GDP report, along with other recent weak economic data, could be giving some investors confidence that the central bank will be able to ease up on the size of any further rate hikes.
In energy trading, benchmark U.S. crude gained 25 cents to $97.28 a barrel in electronic trading on the New York Mercantile Exchange. It lost 84 cents to $96.42 on Thursday.
Brent crude, the international pricing standard, added 3 cents to $101.86 a barrel.
In currency trading, the U.S. dollar fell to 133.24 Japanese yen from 134.27 yen late Thursday. The euro cost $1.0220, inching up from $1.0199.
Source: Bahrain News Agency