Asian stocks rise on renewed confidence, strong earnings

HONG KONG, AFP: Asian stocks enjoyed solid gains on Friday after a big finish on Wall Street, with renewed investor confidence and strong earnings by major industry players driving shares up.

The Nikkei was the region’s biggest winner, closing 1.4% higher following a decision by the Bank of Japan to maintain its easy money policy.

Tokyo also got a boost from electronics giant Sony, which ended more than 2% up after announcing a record $ 85 billion in sales for the full year ending in March.

It attributed the bumper year to a weaker yen, strong gaming hardware sales and “higher revenues for anime streaming services” including from the acquisition of streaming platform Crunchyroll.

The conclusion of the two-day BoJ meeting, meanwhile, offered little in the way of surprises, with the central bank announcing a one-year-plus review of its longstanding monetary easing measures, but opting to keep them in place for the time being.

The decision for the review “is partly aimed at telling the financial market that policy changes will not be conducted immediately”, Nomura Research Institute economist Takehide Kiuchi wrote in a commentary.

“Belief that policy changes will come later prompted yields to fall, the yen to ease and stocks to rise,” IwaiCosmo Securities said in a note.

Shanghai was up more than 1% at the close, buoyed by strong tech shares, while Hong Kong also finished higher.

Seoul, Sydney, Taipei, Wellington, Mumbai and Manila were all up, while Jakarta, Bangkok, Singapore and Kuala Lumpur were down.

Frankfurt was more or less flat in early trade, while London and Paris edged down after opening in the green.

On Wall Street, a 14% surge in Meta shares – along with strong performances by other tech giants – boosted sentiment, as did receding fears of further turmoil in the banking sector, which had acted as a drag on global markets.

Art Hogan, an analyst at B. Riley Financial, said: “the worst of the regional bank turmoil is likely in the rear mirror”, noting that most US lenders released earnings that were reassuring.

Meanwhile, fresh US macroeconomic data was a mixed bag: though growth slowed more than expected in the first quarter, resilient employment and a bounce back in personal consumption offered a silver lining, pumping the brakes on recession fears.

“The consumer is still in too good of shape for the recession to start in the second quarter,” Oanda’s Edward Moya said in a note. “GDP growth is about to flat line, but it might squeeze out a tiny gain this quarter.” Focus now turns to the US Federal Reserve’s monetary policy meeting next week, with the market expecting the Fed to consider strong consumer spending and a drop in weekly jobless claims as evidence that the economy can take more inflation-fighting interest rate hikes.

The International Monetary Fund’s European department director Alfred Kammer urged the continent’s central banks on Friday to “kill the beast” of inflation by pursuing interest rate hikes of their own.

The European Central Bank has followed the Fed in hiking interest rates since last year, and will meet to discuss rates next week.