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Asian markets rose on Friday as positive economic data from China and the successful listing of British chip designer Arm boosted sentiment.
Hong Kong’s Hang Seng Index led gains in the region, rising 1.7%, Tokyo’s Topix rose 1.2% and South Korea’s Kospi rose 1.3%. China’s CSI 300 index reversed earlier losses on the day and rose 0.1%.
Asian shares rose after official data showed retail sales and industrial production rose more than analysts expected. China’s economy has struggled to rebound after damaging zero-COVID measures were rolled back late last year, and investors are on high alert for signs that recent stimulus measures may be having an impact.
“Optimism is growing among a group of investors who believe Beijing’s recent moves to stimulate the economy and stabilize financial markets are showing signs of success,” said Stephen Innes, managing partner at SPI Asset Management.
Innes added that “a single month of positive data is not enough to confirm a sustained path to recovery”.
The positive data came after the People’s Bank of China cut banks’ reserve requirement ratio by 0.25 percentage points to 7.4%, freeing up about 500 billion yuan ($70 billion) of liquidity for lenders.
Goldman Sachs analysts wrote in a note that the rate cut would help offset a surge in local government bond issuance in recent weeks that has drained liquidity from the banking system and pushed up interbank lending. Borrowing costs.
“Injecting liquidity through lower reserve requirements will help curb interbank rates amid strong liquidity needs and ensure lower funding costs for banks,” analysts wrote.
The debut of chip design company Arm also boosted market sentiment, with the company closing up nearly 25% on its first day of trading in New York.
The SoftBank-backed company’s nearly $5 billion listing was Wall Street’s largest initial public offering in the past two years, with a first-day share price jump pushing its market value to more than $65 billion.
The S&P 500 and the tech-heavy Nasdaq Composite ended nearly 1% higher on Thursday.
When Wall Street trading begins later in the day, futures expect the S&P 500 to rise 0.2%, while the FTSE 100 is expected to rise 0.5%.
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