With all eyes on the impending U.S. nonfarm payrolls data, which is anticipated to offer more hints about when the Federal Reserve may start lowering interest rates, most Asian markets saw little movement on Friday.
After the Reserve Bank of India held interest rates unchanged as anticipated and signaled a stronger prognosis for the Indian economy, Indian stocks surged, exceeding most of their peers.
Wall Street’s mediocre overnight indications for regional equities came as investors braced themselves for the payroll data, which is anticipated to offer clear signals on the labor market and interest rates.
In Asian trade, U.S. stock index futures remain stagnant.
Nevertheless, this week’s interest rate cuts by the European Central Bank and the Bank of Canada raised hopes for looser monetary policy this year and helped to partially increase investor appetite for riskier assets.
RBI raises GDP forecast as Indian stock prices continue to rise.
The RBI raised its forecast for annual gross domestic product growth but maintained the policy repo rate, which caused the NSEI and BSESN indices in India to rise by 0.5% and0.7%, respectively.
The RBI stated that its revised estimate of 7.2% GDP for the current fiscal year was higher than its previous estimate of 7%.
The two Indian stock indices recovered most of their weekly losses on Friday, but they were still trading lower for the week after plunging from all-time highs.
A BJP-led alliance secured a significantly lower majority in the 2024 elections, resulting in losses and a challenging third term for Prime Minister Narendra Modi.
Japanese markets decline slightly as BOJ gets ready to tighten regulations.
The Nikkei 225 and TOPIX indices in Japan experienced a 0.2% decline, primarily due to increasing speculation that the Bank of Japan may reduce its bond purchases and tighten monetary policy the following week.
This week, Governor Kauo Ueda reaffirmed intentions for such an action, and expectations of stricter policy were further raised by indications of a pick-up in Japanese inflation and rising wages.
However, additional data that was made public on Friday revealed that Japanese household expenditure declined in April more than anticipated, casting uncertainty on the BOJ’s exact amount of leeway to tighten policy.
Chinese stocks decline following conflicting trade data
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Following inconsistent trade data from the nation, China’s Shanghai Composite and Shanghai Shenzhen CSI 300 indexes dropped 0.3% and 0.8%, respectively, on Friday.
Losses in Hong Kong’s Hang Seng fell by 0.7% due to losses in mainland equities.
May saw a substantially greater increase in China’s exports than anticipated due to strong industrial production and rising international demand.
However, import growth was less rapid than anticipated because of the weak local demand and low consumer expenditure.
As expectations for further stimulus measures from Beijing have tempered confidence over the country’s economic recovery, Chinese stocks have stayed mostly rangebound in recent weeks.
Asian stocks on the whole rose somewhat. In catch-up trading on Thursday following a holiday, South Korea’s KOSPI jumped 0.7% while Australia’s ASX 200 index increased by 0.3%.