Asia report: Most markets rise after week of losses

Markets in Asia were mostly higher on the last trading day of the week, as investors in the region jumped on the recovery bandwagon following a global sell-off earlier in the week.

In Japan, the Nikkei 225 was ahead 2.32% at 28,804.47, as the yen strengthened 0.13% against the dollar to last trade at JPY 109.33.

Of the major components on the benchmark index, automation specialist Fanuc was up 2.78%, fashion firm Fast Retailing added 3.22%, and technology conglomerate SoftBank Group was 0.72% higher.

The broader Topix index was 1.86% firmer by the end of trading in Tokyo, closing at 1,883.42.

On the mainland, the Shanghai Composite was 1.77% firmer at 3,490.38, and the smaller, technology-heavy Shenzhen Composite advanced 1.8% to 2,293.87.

South Korea’s Kospi was ahead 1% at 3,153.32, while the Hang Seng Index in Hong Kong rose 1.11% to 28,027.57.

Internet giant Alibaba plummeted 4.03% in the special administrative region, however, after the company reported its first operating loss as a public company in its fourth quarter.

The blue-chip technology stocks were stronger in Seoul, with Samsung Electronics up 2.04% and SK Hynix 0.85% firmer.

Investor sentiment had spent much of the week in the doldrums, as fears of inflation put the spooks up market participants that central banks could raise interest rates and end Covid-19 pandemic stimulus programmes.

“A raft of inflation data releases has provided a constant undertone of fear, with a surge in PPI and CPI out of the US and China highlighting the theme that will dominate the months ahead,” said IG senior market analyst Joshua Mahony.

“Nonetheless, this has been something central bankers have warned us about, and for the time being this jump in prices can be explained away as representing the kind of transitory price movements predicted by the Fed.”

Mahony said that fortunately for the Federal Reserve, its plan to expand the inflation target to an average target allowed for such an overshoot.

“However, it seems likely that this is something we will see across the likes of the ECB and BoE unless they plan to rapidly withdraw stimulus in a bid to combat the potential temporary surge in prices that come alongside reopening moves.”

Oil prices were higher as the region entered the weekend, with Brent crude up 1.1% at $67.78 per barrel, and West Texas Intermediate also rising 1.1% to $64.52.

In Australia, the S&P/ASX 200 managed gains of 0.45% to 7,014.20, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was the region’s odd one out, losing 0.48% to 12,367.86.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.12% at AUD 1.2923, and the Kiwi advancing 0.23% to NZD 1.3884.