The Asian stock market saw a mixed performance on Friday, with most stocks rising, particularly in the technology sector. The gains were largely driven by positive earnings reports from tech giants such as Microsoft and Alphabet. However, the overall sentiment was tempered by uncertainties around interest rates and inflation data.
Japanese stocks experienced a modest uptick, with the Nikkei 225 index rising by 0.4% and the TOPIX by 0.2%. The focus was on the Bank of Japan meeting, where investors were eagerly awaiting the outcome. Additionally, softer-than-expected Tokyo inflation data added to the market uncertainty. The central bank's decision to keep rates on hold, along with the weakening yen, contributed to the cautious sentiment in the Japanese market.
Across the region, gains in U.S. stock index futures had a positive impact on Asian markets. South Korea's KOSPI rose by 1%, while Hong Kong's Hang Seng index added 1.5%, reaching a five-month high. The strong performance was supported by gains in oil and gas giant CNOOC Ltd after reporting better-than-expected quarterly earnings.
Tech-heavy Asian bourses emerged as the best performers, fueled by positive earnings from U.S. tech giants. The demand for artificial intelligence, a key driver of the earnings beat, is expected to continue to drive tech valuations in the future. This optimism was reflected in the gains seen in China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes.
The positive sentiment in the Asian stock market was also influenced by futures pointing to a positive open for India's Nifty 50 index. Similarly, local tech stocks in India were expected to benefit from the broader gains in the technology sector. However, Australia's ASX 200 was the sole underperformer for the day, falling by 1.3% due to concerns over higher producer price index inflation and potential interest rate hikes.
While the Asian stock market showed overall resilience and optimism, fueled by positive earnings and gains in the technology sector, uncertainties around interest rates, inflation data, and global market trends continue to impact investor sentiment. It is crucial for investors to closely monitor market developments and stay informed to make informed investment decisions.