Asian stocks rose on Friday as tech firms enjoyed a much-needed rebound from the heavy selling of recent weeks. The upturn followed data showing the US economy added less than half the jobs than forecast in June, suggesting the labour market was not as strong as previously thought. This gives the Federal Reserve some breathing room to hold off an expected rate hike for now.
Market Movements
Seoul's Kospi closed up 5.8 percent, having tanked around 20 percent from its June 19 record high, boosted by strong rallies in SK hynix and Samsung. Tokyo climbed more than one percent, along with Hong Kong, Manila, Bangkok, and Jakarta. There were also gains in Shanghai, Singapore, Wellington, Taipei, and Mumbai.
Fed Rate Hike Speculation
Speculation has grown since the Federal Reserve's June policy meeting that it will announce an increase this year. New Fed Chair Kevin Warsh emphasized price stability as his key goal, citing persistently elevated inflation. However, the likelihood of a US rate hike before the end of the year remains uncertain.
Economic Indicators
The US jobs data showed less than half the jobs were added in June compared to forecasts, and figures for the previous two months were also revised down. This has led investors to lower their rate expectations, causing the dollar to extend losses and non-yielding gold to climb towards $4,200.
Global Market Impact
The gains in Asia followed a mixed day on Wall Street, where the Nasdaq sank 0.8 percent but the Dow jumped more than one percent. Analysts noted that the retreat in tech plays was unsurprising given the significant gains they have made over the past two years. Traders were rotating from the tech sector into other industries where bargains can be found.
