Asia stocks trade higher amid improving investor sentiment following US gains
Asia stocks traded higher Friday morning amid improved investor sentiment following overnight gains on Wall Street.
Japan’s Nikkei 225 rose more than 0.8 percent in early trade while the Topix index gained around 0.6 percent. Shares of Fast Retailing, the company behind the Uniqlo chain of apparel stores, jumped almost 4 percent.
The upward moves followed even as government data revealed Japanese household spending for November declined more than expected. It fell 0.6 percent compared to a year earlier — economists in a Reuters poll were expecting a drop of 0.1 percent.
South Korea’s Kospi also rose more than 0.3 percent.
Australia’s ASX 200 rose 0.12 percent in morning trade, with most sectors seeing gains.
Data released by the Australian Bureau of Statistics Friday morning showed that seasonally adjusted retail sales in the country was up 0.4 percent in November from a month earlier, beating a Reuters poll that predicted a 0.3 percent gain.
Shares of retailers in the country gained; Wesfarmers rose 1.53 percent, Woolworths advanced 0.49 percent and JB Hi-Fi added 2.52 percent.
“Retail Sales data around this time of year are particularly interesting as consumer spending patterns have been shifting,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a morning note.
He cited the rise of sales days such as Black Friday and Cyber Monday as resulting in households pushing their Christmas and Boxing Day expenditure forward into November.
The mainland Chinese markets, watched in relation to the ongoing trade war between Beijing and Washington, are set to open at 9:30 a.m. HK/SIN.
Overnight on Wall Street, the Dow Jones Industrial Average and S&P 500 both notched gains, putting them on a five-day winning streak. The Dow added 122.80 points to close at 24,001.92 while the S&P 500 advanced 0.4 percent to finish its trading day at 2,596.64. The Nasdaq Composite also rose 0.4 percent to close at 6,986.07.
The U.S. moves came despite Federal Reserve Chairman Jerome Powell voicing concern over increasing U.S. debt.
“I’m very worried about it,” Powell said at The Economic Club of Washington, D.C. “From the Fed’s standpoint, we’re really looking at a business cycle length: that’s our frame of reference. The long-run fiscal, nonsustainability of the U.S. federal government isn’t really something that plays into the medium term that is relevant for our policy decisions.”
However, “it’s a long-run issue that we definitely need to face, and ultimately, will have no choice but to face,” he added.
The Fed chief’s comments came as the annual U.S. deficit reaches new sustained highs above $1 trillion, a fact many economists worry could spell trouble for future generations. Annual deficits have topped $1 trillion before, but never during a time of sustained economic growth such as now, raising concern about what would happen if a recession hits.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 95.539 after seeing an earlier low around the 95 handle yesterday.
The Japanese yen, widely viewed as a safe-haven currency, traded at 108.35 after seeing highs below 108 yesterday. The Australian dollar was at $0.7185 after seeing lows above $0.714 in the previous session.
— Reuters and CNBC’s Thomas Franck contributed to this report.