Asia report: Most markets finish turbulent week higher

Asia-Pacific markets closed higher on Friday, following a rebound on Wall Street that lifted investor sentiment after a week of volatility.

The rally in US stocks was spurred by positive labour market data, which allayed fears of an impending recession.

The S&P 500 surged 2.3%, marking its best performance since November 2022.

“Following Wall Street's robust rally overnight, Asian stock markets are mostly up on Friday,” said TickMill market analyst Patrick Munnelly.

“This is because yesterday's data showed a larger than expected decline in first-time claims for US unemployment benefits, allaying fears that the world's largest economy may be heading into a recession.

“This increased the likelihood of several interest rate reductions in the months to come.”

Munnelly noted that the Japanese stock market was trading higher on Friday, reversing its losses from the prior session, although momentum had faded somewhat.

“Index heavyweights and financial stocks are leading the advances across all sectors, as the benchmark Nikkei 225 was above the 35,200 mark.”

Most markets in the green after volatile week of global trading

In Japan, the Nikkei 225 rose 0.56% to close at 35,025.00, while the Topix gained 0.88% to reach 2,483.30.

Fujikura led the gains on Tokyo’s benchmark with a 19.7% increase, followed by Trend Micro at 14.83% and Taisei at 7.77%.

China's markets, however, saw a downturn.

The Shanghai Composite dropped 0.27% to 2,862.19, and the Shenzhen Component fell 0.62% to 8,393.70.

Losses in Shanghai were led by Heilongjiang Interchina Water Treatment, which plummeted 10.07%, Shaanxi Aerospace Power Hi-Tech at 10.04%, and GEN S Power Group at 9.94%.

Hong Kong's Hang Seng Index rose 1.17% to 17,090.23, with Li Auto, SMIC, and China Hongqiao Group posting gains of 5.45%, 4.94%, and 4.26%, respectively.

South Korea's Kospi advanced 1.24% to 2,588.43, with standout performances from EcoPro Materials, which surged 12.11%, Hanwha Solutions at 10.35%, and Hankook Tire at 7.73%.

Australia's S&P/ASX 200 increased by 1.25% to close at 7,777.70.

Life360 led Sydney's gains with an 18.09% gain, followed by IDP Education at 7.88% and REA Group at 6.78%.

New Zealand's S&P/NZX 50 edged down 0.11% to 12,243.46, with KMD Brands, Tourism Holdings, and Restaurant Brands New Zealand all experiencing declines of 4.76%, 2.86%, and 2.67%, respectively.

In currency markets, the dollar was last down 0.01% on the yen to trade at JPY 147.22, while it weakened 0.13% against the Kiwi to NZD 1.6608.

The greenback did, however, gain 0.07% on the Aussie to last change hands at AUD 1.5180.

Oil prices were relatively flat, with Brent crude futures last down 0.06% on ICE to $79.11 per barrel, while the NYMEX quote for West Texas Intermediate edged up 0.03% to $76.21.

Consumer inflation hastens in China, producer prices drop less than expected

In economic news, China's consumer price index (CPI) rose 0.5% year-on-year in July, surpassing expectations for a 0.3% increase, according to data released earlier.

That marked an acceleration from June's 0.2% gain, indicating a modest uptick in consumer prices.

Meanwhile, China's producer price index (PPI) fell by 0.8% in July compared to the same period last year.

The decline was slightly less severe than the forecast 0.9% drop and remained consistent with the 0.8% decrease seen in June, reflecting ongoing deflationary pressures in the industrial sector.

Market momentum came on the back of initial unemployment claims in the US overnight, which fell more than expected last week, providing some relief amid concerns of a slowing labour market.

The US Labor Department reported that 233,000 people filed for jobless benefits, a decrease of 17,000 from the prior week and below the anticipated 240,000 filings.

That contrasted with other recent signs of weakening job growth, offering a mixed picture of the US labour market's health.

Reporting by Josh White for Sharecast.com.