Asian Stocks Recover, But Fed Concerns Still in Play By Investing.com

By Ambar Warrick 

Investing.com– Most Asian stock markets rose on Friday, tracking an extended recovery in Wall Street as the dollar and Treasury yields came off recent highs.

But hawkish signals from the Federal Reserve kept broader gains capped, as investors priced in an over that the central bank will raise interest rates by 75 basis points in September. 

Still, a strong lead-in from put most regional markets on track for weekly gains. 

China’s bluechip index rose 1.1%, while the index added 0.7% after substantially weaker-than-expected for August drove up expectations of more stimulus measures by the Chinese government.

Beijing has already promised to increase spending in the third quarter, as Chinese economic growth slowed to a crawl this year due to continued COVID-related lockdowns. 

The Chinese stock indexes were set to gain 1.4% and 2.2% for the week, breaking a three-week losing streak. 

Hong Kong’s technology-heavy index was the best performer for the day, jumping 2.5% as easing yields benefited major tech stocks. The BATs trio- Baidu (HK:), Alibaba Group Holding Ltd (HK:), and Tencent Holdings Ltd (HK:), rose between 1.7% and 4%. 

But losses in Tencent earlier this week, amid by a major stakeholder, put the Hang Seng on course for a 0.6% weekly loss. 

In the Asia-Pacific region, Australia’s rose 0.5%, and was also on course to break a two-week losing streak. Major miners BHP Group Ltd (ASX:) and Rio Tinto Ltd (ASX:) were among the biggest boosts to the index, rising over 2% in tandem with prices. Rates of the red metal surged overnight on the prospect of tighter supply stemming from , the world’s largest copper mine. 

Data earlier this week showed Australia’s continued to expand in the second quarter, albeit at a slightly lesser-than-expected pace. But Australian slumped in July, amid a slowdown in major partner China. 

Despite the week’s gains, most Asian markets are nursing steep losses this year, as rising interest rates in the United States pressured most global stock markets.

Fed Chair Jerome Powell reiterated the central bank’s hawkish stance on Thursday, stating that was needed to combat inflation. An increased pace of rate hikes by the Fed is likely to weigh on stock markets this year.