Wall Street Rally Boosts Sentiment; Tech Earnings in Focus

Asian stock markets mostly climbed on Friday, buoyed by Wall Street’s strong performance and optimism surrounding Big Tech earnings. However, mixed economic data and lingering concerns over global trade tensions tempered gains.

Asian Markets Overview
Japan’s Nikkei 225 rose 0.53%, while the broader Topix index gained 0.21%. Tokyo’s core consumer price index (CPI) increased by 2.5% year-over-year in January, meeting expectations. Meanwhile, Japan’s unemployment rate increased to 2.4% in December, though it slightly missed forecasts. Retail sales grew by 3.7%, and industrial production rebounded with a 0.3% increase after a 2.2% decline in the previous month.

South Korea’s Kospi fell 1.14% after a four-day break, while the Kosdaq dropped 0.36%. Australia’s S&P/ASX 200 rose 0.45%, closing at a record high of 8,532.30, marking its third consecutive day of gains. The Australian Bureau of Statistics reported that the country’s producer price index (PPI) rose 3.7% in the December 2024 quarter.

In India, markets moved higher ahead of the Union Budget, with the Nifty 50 gaining 0.71% and the BSE Sensex rising 0.58%. Hong Kong and Chinese markets remained closed for the Lunar New Year holiday.

Wall Street Rally Lifts Sentiment
U.S. markets provided a positive backdrop for Asian trading, with all three major indexes posting gains. The Dow Jones Industrial Average climbed 168.61 points (0.38%) to close at 44,882.13 after briefly surging nearly 300 points during the session. The S&P 500 rose 0.53% to 6,071.17, while the Nasdaq Composite added 0.25% to finish at 19,681.75.

Investors reacted favorably to earnings reports from major technology companies, but concerns about potential economic headwinds and trade tensions lingered. Late in the session, stocks pared some gains after U.S. President Donald Trump announced plans to impose 25% tariffs on imports from Canada and Mexico. The move introduced fresh uncertainty into the markets, dampening the earlier rally.

Wall Street Rally Boosts Sentiment; Tech Earnings in Focus

Commodities and Rates
In commodities, gold prices increased 0.13% to 2,847.35 per ounce, silver rose 0.682,847.35 per ounce, and silver rose 0.6832.65. Oil prices also advanced, with Brent crude climbing 0.59% to 76.49 per barrel, WestTexas Intermediate (WTI) crude gaining 0.8376.49 per barrel, and WestTexas Intermediate (WTI) crude gaining 0.8373.34.

Bond yields remained steady, with the U.S. 10-year Treasury yield at 4.545%, the UK 10-year yield at 4.5590%, and Germany’s 10-year yield at 2.517%.

Key Data and Events
Economic data releases included the European Central Bank’s refinancing rate, which held steady at 2.90%, which was in line with expectations. In the U.S., unemployment claims came in at 207,000, below the forecast of 224,000, signaling continued strength in the labor market.

Investors are focused on key events, including Canada’s GDP data release and the U.S. Core PCE Price Index, a key inflation gauge, scheduled for 1:30 PM GMT. Investors will also closely watch the U.S. Employment Cost Index for insights into wage growth and inflationary pressures.

Market Outlook
While Asian markets benefited from Wall Street’s gains, analysts caution that volatility could persist as investors weigh corporate earnings, economic data, and geopolitical developments. The potential for escalating trade tensions and central bank policy decisions remain key factors influencing market sentiment in the weeks ahead.

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