Asian Market Snapshot: Stocks Gained on Optimism About Corporate Earnings and Better than Expected U.S. Job Data

Asian markets opened lower but quickly pared back their losses to close up for the last day of the week amid optimism about corporate earnings and better than expected U.S. initial jobless claims. Yesterday after Asian markets closed, the U.S. labor department reported that jobless claims dropped more than expected. Initial claims dropped in the week ending August 21st to 473K from an upward revised number of 504K. The median economists’ estimate from the Bloomberg survey was 490K. (See RGE critical issue: U.S. Labor Market: Initial Unemployment Decline, But Still Elevated). 

The MSCI Asia Pacific Index rose 0.6% to 117, closing the week down 1.5% while the MSCI ASIA APEX 50 rose 0.1% to 733 to end the week down 2.1%.

In Japan, stocks advanced led by exporters after the finance ministry said the currency situation is severe.  The Nikkei 225 gained 0.9% to 8,991 to close the week down 2.1%. Nissan rose 3.2%.

In Hong Kong, stocks fell led by developers after Henderson Land Development reported a more than estimated decline in H1 profit. The Hang Seng Composite fell 0.1% to 20,597, closing the week down 1.8%. ICBC gained 1.3% after earnings beating analysts’ forecast. Henderson declined 1.6%.

In mainland China, stocks advanced on a sector rotation as investors sought defensive stocks and dumped cyclical. The Shanghai SE Composite gained 0.3% to 2,611 to close the week down 1.2%. Health care and consumer staples led the gains. Property developers declined.

In India, stocks fell led on concerns the U.S. will lower its Q2 growth estimate. Financials (down 2.06%) and technology (down 1.97%) led the declines.The BSE SENSEX 30 declined 1.3% to 17,998 to close the week down 2.2%. 

In Australia, the S&P/ASX 200 index advanced 0.3% to 4,370 for a weekly loss of 1.4% while in Korea, the KRX 100 rose 0.1% to 3,638 ending the week down 2.5%.

In Asian trade, the yen weakened 0.05% to 84.67 while other major Asian currencies gained. The Aussie dollar advanced 0.5% while the New Zealand kiwi rose 0.52%.

10-year JGBs fell with the yield up 6.8 bps to 1.009%. Sovereign CDS spreads widened across the region with Indonesian 5-year spread up 12.6 bps to 167 bps. Corporate spreads also widened in Asia ex-Japan with the Markit iTraxx Asia ex-Japan 50 IG up 5.3 bps to 139 bps and slightly narrowed in Japan with the iTraxx Japan index down 0.1 bps to 112 bps.

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