Asian shares advance on back of Wall Street gains

BANGKOK: Shares rose in Asia on Friday after an advance on Wall Street led by the latest rally in technology companies.

Chinese benchmarks rose on reports the government is planning new measures to support the ailing property sector, which has dragged on growth over the past several years.

The relaxation of some of the country's "zero-Covid" rules is also boosting hopes for the economy will gain momentum, though experts say it will take months for tourism and other business to recover from the disruptions of the pandemic.

"Asian stocks are a bit higher, but full-out exuberance has been tempered by rising Covid cases and skepticism of the force of reopening economic tailwind that the current level of Asian risk assets implies,'' Stephen Innes of SPI Asset Management said in a commentary.

While outside experts had increasingly criticized China's containment policy, which sought to isolate every case, as unsustainable, they have also warned that the country will now face a challenging first wave, as the loosened measures will no doubt fuel an increase of cases.

Hong Kong's Hang Seng index rose 1.5 per cent to 19,726.07. The Shanghai Composite index climbed 0.2 per cent to 3,203.57.

Tokyo's Nikkei 225 index gained 1.3 per cent to 27,924.81 and the Kospi in Seoul rose 0.4 per cent to 2,380.87. Australia's S and P/ASX 200 picked up 0.5 per cent to 7,211.60.

On Thursday, the S and P 500 rose 0.8 per cent to 3,963.51, while the tech-heavy Nasdaq composite closed 1.1 per cent higher, at 11,082.

The Dow Jones Industrial Average added 0.5 per cent to 33,781.48.

Small company stocks gained ground. The Russell 2000 index added 0.6 per cent to 1,818.29.

Tech stocks powered much of the rally, along with health care companies and retailers. Chipmaker Nvidia climbed 6.5 per cent, Pfizer rose 3.1 per cent and Nike gained 2.8 per cent.

Bond yields mostly rose. The yield on the 10-year Treasury note, which helps set mortgage rates, increased to 3.49 per cent from 3.42 per cent late on Wednesday.

Major indexes are all in the red for the week and have been swinging between big monthly gains and losses throughout the year.

Investors' worries about inflation, rising interest rates and recession risks have made for a volatile market. That has also left Wall Street focused on data points on the economy, especially those regarding inflation.

Activision Blizzard lost 1.5 per cent after the Federal Trade Commission said it is suing to block Microsoft's planned USD 69 billion takeover of the video game company, saying it could suppress competitors to its Xbox game consoles and its growing games subscription business. Microsoft rose 1.2 per cent.

On Thursday, the US reported slightly more Americans filed for jobless claims last week, but not as many as economists had forecast.

The labour market remains one of the strongest pockets of the economy, which has been stifled under the weight of stubbornly hot inflation and rising interest rates.

Low unemployment is good for the broader economy but makes it more difficult for the Federal Reserve to tame inflation.

The central bank has been raising interest rates to curb borrowing and spending in order to cool stubbornly hot inflation. Its benchmark interest rate sits at 3.75 per cent to 4per cent, the highest in 15 years.

The Fed will meet next week and is expected to raise its benchmark interest rate by a half-percentage point.

Resilient consumer spending, which is partly tied to strong employment, has made the fight against inflation more difficult but has been keeping the economy strong enough to avoid recession, analysts say.

It is also increasing the chances that the Fed will go too far in raising interest rates.

Wall Street will get more insight into how consumers feel about inflation and the economy on Friday when the University of Michigan releases its consumer sentiment survey for December.

Investors will also get an update on how inflation is impacting businesses when the government releases its latest monthly report on wholesale prices Friday.

In other trading, US benchmark crude oil gained 51 cents to USD 71.97 per barrel in electronic trading on the New York Mercantile Exchange. It settled 0.8 per cent lower at USD 71.46 per barrel.

Brent crude added 57 cents to USD 76.72 per barrel.

The US dollar slipped to 135.99 Japanese yen from 136.69 yen. The euro rose to USD 1.0581 from USD 1.0556.