TOKYO (AP) – Asian stocks were mostly higher Thursday as investors welcomed encouraging economic data and quarterly earnings reports from major companies.
Benchmarks rose in Tokyo, Hong Kong, Shanghai and Seoul, but fell in Taiwan and India. Sydney finished flat. The gains followed a strong rally on Wall Street.
Concerns eased somewhat with the visit of US House Speaker Nancy Pelosi to Taiwan after she left for South Korea and was then due to head to Japan, staunch US allies for decades. But analysts said some geopolitical risks remain, with China conducting military exercises near the self-ruled island it claims as its own territory.
“Despite the easing of immediate concerns, investors will be on the lookout for any potential escalation in US-China tensions, and China’s economic sanctions could negatively impact risk sentiment and positioning in Asian markets,” said Anderson Alves of ActivTrades.
Alves said investors are also looking to U.S. nonfarm payrolls, due Friday, for signs of hiring and how that could affect interest rate policy. But overall, Pelosi’s trip so far has had little impact on markets.
Japan’s benchmark Nikkei 225 added 0.7% to end at 27,932.20. Australia’s S&P/ASX 200 gave up earlier gains, losing just 1 point to 6,974.90. South Korea’s Kospi rose 0.5 percent to 2,473.66. Hong Kong’s Hang Seng rose 1.6% to 20,092.04, while the Shanghai Composite rose 0.5% to 3,177.92.
India’s Sensex lost 0.5% and Taiwan’s Taiex also fell 0.5%.
On Wall Street, the S&P 500 rose to 4,155.17, a nearly two-month high. The Nasdaq gained 2.6% to 12,668.16. Both indexes recovered losses earlier in the week. The Dow Jones Industrial Average rose 1.3% to 32,812.50. The Russell 2000 index of smaller companies ended 1.4% higher at 1,908.93.
Technology companies, retailers and communications companies were some of the big winners. Only the values of the energy sector fell, dragged down by the drop in the price of oil.
Investors cheered a report on the services sector, which makes up most of the US economy. The sector grew faster than expected in July, according to the Institute for Supply Management. A separate report showed that US orders for the most important durable goods rose more than expected in June.
Some weak recent data on the economy fueled speculation that the peak in inflation and aggressive rate hikes by the Federal Reserve may be approaching or may have already passed. The weak data, however, also shows the risk of a recession as the Fed slows the economy.
That’s why Wednesday’s more positive economic reports helped put traders in a buying mood.
“This just gives people more evidence that this economy is hanging around,” said Jeff Buchbinder, equity strategist at LPL Financial. “At this point, we have a mix of evidence that inflation is coming down.”
The 10-year Treasury yield fell to 2.71% from 2.73% late Tuesday.
Earnings remain in focus this week as investors look to the latest earnings and company statements to better understand how inflation is affecting businesses and consumers.
Oil prices rose after OPEC’s decision to raise production in September at a much slower pace than in previous months, but then fell. Benchmark US crude lost 9 cents to $90.57 a barrel. On Wednesday, US crude fell 4% to settle at $90.66 a barrel. Brent crude, the international standard, fell 18 cents to $96.60 a barrel.
Markets are also watching for possible economic fallout from China following US House Speaker Nancy Pelosi’s visit to Taiwan. China claims self-governing Taiwan as part of its territory and banned imports of Taiwanese citrus fruits and frozen fish in retaliation for Pelosi’s visit. But it has avoided disrupting the flow of computer chips and other industrial goods, a move that could shake the global economy.
Upcoming labor market data could help investors determine how the Federal Reserve will move forward with its interest rate policy, which has been aggressive in trying to control inflation. Last week’s US jobless claims numbers will be released on Thursday and the government will issue its July jobs report on Friday.
In currency trading, the US dollar rose to 134.24 Japanese yen from 133.85 yen. The euro was at $1.0166, little changed from $1.0170.
Yuri Kageyama is on Twitter