Asia shares, Europe futures up; Adani stocks hit: markets wrap

Asian stocks advanced for a sixth-straight day and Europe equity futures climbed as a surge in US tech shares and China’s reopening helped investors shrug off mixed data on the American economy.

The moves are set to extend the weekly run of gains for the MSCI Asia Pacific Index to five as it heads for the highest close since April. Hong Kong-listed technology stocks were among the regional leaders on Friday, as they have been since around October.

A report that Japan and the Netherlands are poised to join the US in limiting China’s access to advanced semiconductor machinery tempered the climb, pulling stocks off their intraday highs. Mainland China remains closed for the Lunar New Year holiday.

Investors are also focused on stocks linked to Indian billionaire Gautam Adani, with the companies expected to provide a detailed response to a short seller’s report that they labeled as “bogus.”

In the meantime, shares of Adani Group’s companies plunged, extending a selloff that began when the report was published. Flagship firm Adani Enterprises Ltd. dropped as much as 6.4%, while Adani Green Energy Ltd. and Adani Transmission Ltd. fell more than 15%. The group’s rout pushed India’s NSE Nifty 50 Index to slide 1%, on course for the lowest since October.

Treasuries declined in Asia and Australian bonds slid, with the nation’s 10-year yields rising more than five basis points. The dollar turned slightly stronger against most Group-of-10 currencies.

The yen rose after Tokyo inflation exceeded estimates and rose to the highest level since 1981. Quickly rising prices will add pressure on the Bank of Japan to scale back its stimulus after it redoubled its efforts to depress bond yields earlier this month.

Japan’s 10-year bond yield climbed 1.5 basis point, to 0.475%, as it edges toward the BOJ’s new ceiling of 0.5%.

“The latest Tokyo inflation report underscores rising price pressure and that could continue to drive speculation of another monetary policy adjustment by the Bank of Japan and further Japanese yen strength,” said Fiona Lim, senior currency analyst at Malayan Banking Bhd. in Singapore.

Asia’s developments followed mixed US economic data Thursday, with gross domestic product rising at a faster-than-forecast pace in the December quarter, but accompanied by signs of slowing underlying demand as rate hikes crimp growth. A surprise drop in initial jobless claims also pointed to resilience in the labour market.

Quarz Capital Asia Singapore Pte sees increasing signs that price pressures have already peaked in the US. “Inflation will most probably slow down to 3%, 3.5% in the second half of this year,” Havard Chi, head of research at the firm, said on Bloomberg Television. Labor data will provide “the slack that basically the Fed needs to start holding and also reducing rate in the second half of the year. This will have quite a positive impact on Asian equities,” he said.

The S&P 500 managed to close at the highest level in more than a month on Thursday, reflecting the jump in tech stocks. The Nasdaq 100 rose 2% to the highest level since September, led by an 11% gain for Tesla Inc. as Elon Musk teased potential for the carmaker to produce 2 million vehicles this year.

US futures went a different direction during Asian trading, in part reflecting Intel Corp. late in the day giving of the gloomiest quarterly forecasts in its history after a personal-computer slump ravaged its business. Intel tumbled in late trading.

Elsewhere in markets, oil rose on the back of optimism over Chinese demand. Gold slid.

Key events:

• American Express, Charter Communications, Chevron, HCA Healthcare to report results Friday
• US personal income/spending, PCE deflator, University of Michigan consumer sentiment, pending home sales, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.3% as of 2:58 p.m. Tokyo time. The S&P 500 rose 1.1%
• Nasdaq 100 futures fell 0.5%. The Nasdaq 100 rose 2%
• Japan’s Topix index rose 0.2%
• South Korea’s Kospi index rose 0.7%
• Hong Kong’s Hang Seng Index rose 0.2%
• Australia’s S&P/ASX 200 Index rose 0.3%
• Euro Stoxx 50 futures rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.0873
• The Japanese yen rose 0.2% to 129.99 per dollar
• The offshore yuan fell 0.3% to 6.7568 per dollar
• The British pound fell 0.2% to $1.2380

Cryptocurrencies

• Bitcoin fell 0.2% to $23,032.39
• Ether fell 1.2% to $1,583

Bonds

• The yield on 10-year Treasuries advanced three basis points to 3.53%
• Japan’s 10-year yield rose 1.5 basis point to 0.475%
• Australia’s 10-year yield advanced five basis points to 3.56%

Commodities

• West Texas Intermediate crude rose 0.5% to $81.44 a barrel
• Spot gold fell 0.4% to $1 924.84 an ounce

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