Asian shares advance as China ups its stimulus and Japan’s Ishiba is chosen to head its ruling party
Associated Press
HONG KONG (AP) — Stocks in Asia advanced Friday, fueled by China’s moves to rev up its economy.
Tokyo’s Nikkei 225 index gained more than 2.3% to 39,829.56 as ruling party lawmakers chose former Defense Minister Shigeru Ishiba to become Japan’s next prime minister. Ishiba, who will take over from Prime Minister Fumio Kishida next week, has proposed an Asian version of the NATO military alliance and a more equal Japan-U.S. security alliance.
The change at the helm was not expected to result in any major policy shift given that the ruling Liberal Democrats have held power for most of the past eight decades since World War II.
The yen also surged, as the U.S. dollar fell to 143.12 Japanese yen from 144.80 yen.
China’s central bank cut its reserve requirement for banks as of Friday as part of measures announced this week to help the property industry and support financial markets.
The Hang Seng in Hong Kong advanced 2.4% to 20,404.62 and the Shanghai Composite index jumped 2.7% to 3,080.88.
Earlier Friday, the Shanghai Stock Exchange encountered glitches that hindered order processing and caused delays after the market opened. This led to a 6.3% increase in Shenzhen’s main index, as investors flocked into that smaller market during the delay.
Trading returned to normal by noon, and the Shanghai Stock Exchange later said in a statement that it was still investigating the cause.
In the latest sign of the malaise hindering growth in the world’s second-largest economy, the government reported that industrial profits fell nearly 18% year-on-year in August.
Shares of Hong Kong’s property giant New World Development surged 19.4% on Friday trading after Adrian Cheng, the third-generation scion at the helm of the conglomerate, had been replaced. The firm reported an annual loss of over $2.4 billion in a profit warning last month, its first loss in nearly 20 years.
Elsewhere in Asia, Australia’s S&P/ASX 200 added nearly 0.1% to 8,212.20, while South Korea’s Kospi lost 0.8% to 2,649.78.
On Thursday, the S&P 500 added 0.4% to 5,745.37, setting an all-time high for the third time this week and the 42nd time this year. The Dow Jones Industrial Average gained 0.6% to 42,175.11, while the Nasdaq composite rose 0.6% to 18,190.29.
Micron Technology led the way with a jump of 14.7% after the maker of computer memory and storage products delivered stronger profit for the latest quarter than analysts expected. It benefited from sales related to artificial-intelligence technology, where a boom has helped drive some stocks to astounding heights.
Jabil climbed 11.7% after the electronics manufacturer likewise reported stronger profit and revenue than expected. It also announced a plan to plow cash to its shareholders by buying back up to $1 billion of its stock.
The biggest drop in the S&P 500 hit Super Micro Computer, which gave back some of its huge gains after more than tripling last year amid the AI frenzy. Its stock tumbled 12.2% following a report from The Wall Street Journal saying the U.S. Department of Justice is probing the seller of servers and storage systems. The company declined to comment.
A round of reports on Thursday suggested the world’s largest economy may be doing better than expected.
Fewer U.S. workers applied for unemployment benefits last week in the latest signal that layoffs remain relatively low across the economy. A separate report said the overall U.S. economy grew at a 3% annual rate during the spring, as previously estimated. That’s a solid rate.
The hope on Wall Street is for a form of financial nirvana where the U.S. economy’s growth holds steady, keeping corporate profits humming while the Federal Reserve continues to lower interest rates.
The Fed last week made a drastic turn in how it sets interest rates. It’s now cutting them to make things easier for the U.S. economy after keeping rates high for years in hopes of extinguishing high inflation. Lower rates not only make it less expensive to borrow money to buy a house, a car or things on credit cards, they can also boost prices for all kinds of investments.
In other dealings early Friday, benchmark U.S. crude oil lost 1 cent to $67.66 per barrel. Brent crude, the international standard, added 13 cents at $71.22 per barrel.
The euro was trading at $1.1134, down from $1.1176.
