Asian stock markets stabilized on Friday, buoyed by robust U.S. GDP data and easing inflation, signaling a potential soft landing for the global economy's largest player.
Investor expectations have increased for three rate cuts by year-end, with some economists forecasting an initial, significant rate cut by the Federal Reserve. The upcoming release of the Personal Consumption Expenditures (PCE) deflator, a key inflation measure favored by the Fed, is anticipated to further clarify the interest rate outlook.
China's Shanghai Composite Index recovered from early losses to close up 0.14% at 2,890.90, while Hong Kong's Hang Seng Index ended slightly higher at 17,021.31 after a volatile trading session.
The Taiwan Weighted Index fell sharply by 3.3% as the market reopened after a two-day closure due to a typhoon.
Japanese markets closed lower, while the yen stabilized near a 12-week high against the dollar ahead of next week's Bank of Japan policy meeting, where a 10-basis-point rate hike is possible. The Nikkei 225 dropped 0.53% to 37,667.41, unable to hold onto earlier gains, and the broader Topix Index finished 0.38% lower at 2,699.54. Hino Motors surged 12.8% and Canon gained 6.7%, both companies reporting strong earnings.
In Seoul, stocks broke a two-day losing streak, driven by financial and shipping firms. The Kospi Index rose 0.78% to 2,731.90. Samsung Heavy Industries jumped 8.4% as analysts predicted improved profitability for shipbuilders by year-end. Financial giants Hana Financial, KB Financial, and Shinhan Financial saw gains between 4% and 6%.
Australian markets also rebounded, led by sectors such as mining, finance, and property development. The S&P/ASX 200 advanced 0.76% to 7,921.30, and the broader All Ordinaries Index edged up 0.73% to 8,153.40. Mineral Resources rallied 3.5% following its fiscal year production results, while Pilbara Minerals rose 3.8%. Bellevue Gold, however, plummeted 21.6% after a capital raising.
In New Zealand, the S&P/NZX-50 Index declined 0.38% to 12,349.47.
In the U.S., stock performance varied as positive Q2 GDP data counterbalanced weaknesses in the technology sector. The economy grew at an annual rate of 2.8% from April through June, a substantial improvement from the 1.4% growth rate in the previous quarter. Inflation pressures eased, with the PCE price index, excluding food and energy, rising 2.9%, down from 3.7% in Q1. Other reports indicated a steep drop in durable goods orders for June and a notable decrease in jobless claims week-over-week.
The Dow Jones Industrial Average edged up 0.2%, whereas the S&P 500 fell 0.5% and the tech-centric Nasdaq Composite dropped 0.9%.
