Asian stocks experienced a mixed close on Friday, despite a downward revision of U.S. first-quarter GDP data renewing optimism for potential Federal Reserve rate cuts this year.
Gains across the region were tempered by hawkish remarks from New York Fed President John Williams and the release of underwhelming PMI data from China.
The dollar remained steady ahead of upcoming Eurozone and U.S. inflation data and in anticipation of next week’s ECB meeting. Meanwhile, gold showed little movement in Asian trading, and oil extended its overnight losses ahead of an OPEC+ meeting expected to discuss supply cuts.
China's Shanghai Composite Index fell by 0.16% to 3,086.81, following official surveys indicating a decline in both manufacturing and non-manufacturing activity, raising concerns about the country's growth prospects. The official manufacturing PMI slipped from 50.4 to 49.5 in May, indicating contraction after two months of growth, while the non-manufacturing PMI inched lower from 51.2 to 51.1.
Hong Kong's Hang Seng Index dropped 0.83% to 18,079.61.
Japan’s markets saw a rally, with the yen weakening after data revealed an unexpected fall in industrial output for April and an unchanged jobless rate. Tokyo's inflation accelerated in May, suggesting that the Bank of Japan might consider a rate hike in the coming months. The Nikkei Average surged 1.14% to 38,487.90, spurred by reports of Japan directing nearly 100 trillion yen ($638 billion) in public funds towards active investing. The wider Topix Index rose 1.70% to 2,772.49.
In Seoul, stocks closed relatively unchanged, with the Kospi Index gaining 1.08 points to 2,636.52 after mixed economic data were released. South Korea’s industrial output rebounded in April after a sharp decline the previous month, though retail sales and investment continued to fall for a second consecutive month.
Australian markets saw a robust rebound, ending a three-day losing streak. Gains were led by banking, mining, and energy stocks. The benchmark S&P/ASX 200 climbed 0.96% to 7,701.70, while the broader All Ordinaries Index increased 0.95% to 7,970.80. Telix Pharmaceuticals surged 15.3% to reach a record high on the back of positive clinical trial data.
Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index soared 2.68% to 11,867.29, reaching its highest level since early May. This rise followed the government’s announcement of modest tax relief and a reduction in new spending in its budget. Meridian Energy surged 10.5% after agreeing to a long-term fixed-price power contract with New Zealand Aluminium Smelters.
In the U.S., stocks closed lower overnight, weighed down by software giant Salesforce’s disappointing quarterly results and revised GDP data indicating slower economic growth in the first quarter. GDP growth was revised down to 1.3% for the first quarter, from the previously reported 1.6%. Weekly jobless claims also rose more than expected, and pending home sales in April slowed to their lowest pace since April 2020.
The Dow Jones Industrial Average fell 0.9% to its lowest closing level in almost a month, the S&P 500 edged down 0.6%, and the tech-centric Nasdaq Composite dropped 1.1%.
