Asian stocks were a mixed bag on Friday amid regional market holidays and a pullback in technology shares, while Japanese markets rallied to near record highs before a key ruling party vote that will decide the country’s next Prime Minister.
Japanese markets were encouraged by Bank of Japan Governor Kazuo Ueda flagging caution over the economy and trade, which presented a less hawkish outlook for the central bank.
Hong Kong stocks, on the other hand, were hit by sharp losses in electric vehicle stocks, which fell tracking an overnight drop in Tesla. Broader tech stocks also faced some profit-taking after strong gains this week.
Regional markets took some positive cues from Wall Street, which finished higher overnight as strength in tech and sustained optimism over interest rate cuts helped markets look past an ongoing U.S. government shutdown. The S&P 500 eked out another record high.
S&P 500 Futures rose 0.1% in Asian trade. Markets were now seeking more cues on the U.S. economy, with a key nonfarm payrolls reading likely delayed due to the government shutdown.
Asian trading volumes were muted on Friday amid market holidays in China and South Korea. Chinese markets will remain closed until the middle of next week.
Japan’s Nikkei near record ahead of PM vote; BOJ sounds caution
Japan’s Nikkei 225 surged 1.6% and was within spitting distance of recent peaks, while the TOPIX added 1.3%.
Local markets were encouraged by the BOJ’s Ueda flagging some caution over the Japanese economy, especially in the face of U.S. trade tariffs and increased overseas uncertainty.
While Ueda did reiterate the BOJ’s stance that interest rates will rise if the economy firms and inflation increases, he flagged increased uncertainties around Japan’s economic outlook. Ueda’s comments suggested an air of caution over the economy, which could deter the central bank from raising interest rates immediately.
Focus in Japan was squarely on a key Liberal Democratic Party vote to be held over the weekend, which will decide the party’s leader and the next Prime Minister of Japan.
The vote comes after Prime Minister Shigeru Ishiba abruptly resigned in September, with markets now looking to a less fiscally conservative successor. Front-runners for the role include LDP veteran Sanae Takaichi, farm minister Shinjiro Koizumi, and Chief Cabinet Secretary Yoshimasa Hayashi.
Hong Kong falls as local EVs track Tesla losses
Hong Kong’s Hang Seng index fell 0.7%, hit by losses in electric vehicle stocks as they tracked an overnight decline in major Tesla Inc (NASDAQ:TSLA).
BYD Co (HK:1211) fell 4.7%, while Li Auto Inc (HK:2015) and Geely Automobile Holdings Ltd (HK:0175) fell 4.2% and 2.4%, respectively. The three were among the worst performers on the Hang Seng.
EV stocks fell tracking a 5% overnight fall in Tesla Inc (NASDAQ:TSLA), as markets largely looked past stronger-than-expected third-quarter delivery figures from the company. While deliveries did hit a record high, analysts said this was largely due to U.S. government tax subsidies on EVs, which are set to be revoked soon by the Trump administration.
Tesla’s China sales also improved, but still reflected bitter competition with local rivals.
Heavyweight Hong Kong tech stocks also fell on Friday after strong gains earlier this week. The Hang Seng was sitting on a 3.7% jump this week, as it rode a wave of gains in tech stocks.
Broader Asian markets were a mixed bag, with Singapore’s Straits Times index losing 0.3%, while Australia’s ASX 200 rose 0.4%.
Futures for India’s Nifty 50 index pointed to a flat open.
Source :
https://www.investing.com/news/stock-market-news/asia-stocks-nikkei-near-record-high-before-pm-vote-hong-kong-dips-on-ev-losses-4269652
