Asia Markets

Asian shares mostly advance as Wall Street's gains support sentiment

Key Points
  • Asian stocks closed mostly higher on Friday, tracking Wall Street's overnight gains.
  • The Nikkei 225 advanced more than 1 percent amid strong earnings.
  • Oil prices slipped from multi-year highs.
  • Sentiment was buoyed after U.S. inflation data came in weaker than expected.

Most Asian stocks closed higher on Friday, with positive sentiment partially driven by gains seen on Wall Street following softer-than-expected U.S. inflation data. Meanwhile, oil prices were slightly lower after reaching recent multi-year highs on geopolitical concerns.

The closed up 1.16 percent, or 261.30 points, at 22,758.48 in Tokyo and the broader Topix gained 0.98 percent. Gains were broad based as investors focused on robust earnings releases in Japan, with the technology and financial sectors advancing, although the Topix mining subindex was down 3.81 percent.

In Seoul, the Kospi climbed 0.55 percent to 2,477.71, aided by the move higher in tech and auto sector stocks, although Samsung Electronics shed 0.58 percent.

Over in Sydney, the S&P/ASX 200 gave up early gains to close off by 0.04 percent at 6,116.20 as the financials and energy subindexes weighed. Major miners, however, ended the day higher.

The rallied 1.01 percent by 3:06 p.m. HK/SIN, with the index on track for its fifth straight day of gains. All sectors on the index traded higher, with gains led by financials and conglomerates. CK Hutchison Holdings stock was up 1.15 percent a day after billionaire Li Ka-shing handed down the chairman position to his son Victor Li.

Mainland markets, meanwhile, finished the day lower, with the off by 0.36 percent at 3,162.85. The Shenzhen composite fell 1.03 percent to 1,825.14.

Markets in Malaysia remained closed on Friday for a special holiday following the landmark general election win by Mahathir Mohamad's opposition alliance.

The iShares MSCI Malaysia ETF, which had initially dropped more than 6 percent in reaction to the surprise election outcome, regained 1.76 percent on Thursday. A knee-jerk reaction that will likely be "more negative than positive" is expected when markets reopen next week "as investors had been pricing in continuity of previous government policy," Prakash Sakpal, Asia economist at ING, said in a note.

MSCI's broad index of shares in Asia Pacific, excluding Japan, was up 0.76 percent.

Overall gains in the region came on the back of Wall Street's sharp gains in the last session, which also saw the Dow close positive for 2018. The overnight advance stateside followed the release of weaker-than-expected U.S. inflation data in the last session.

The lighter-than-forecast number eased concerns about the Federal Reserve tightening monetary policy at a faster rate than the market is expecting.

Geopolitics remained a focus in commodities markets, with oil prices trading slightly lower. On Thursday, U.S. West Texas Intermediate futures were off by 0.14 percent at $71.26 per barrel and Brent crude futures edged down by 0.22 percent to trade at $77.30.

Oil had settled slightly higher in the last session amid investor concerns over the impact of renewed U.S. sanctions on Iran oil exports. President Donald Trump had announced the U.S. would withdraw from the Iran nuclear deal earlier this week.

Bank of America Merrill Lynch analysts said Brent crude prices could rise as high as $100 per barrel on the back of factors including geopolitics.

Also of note, Trump on Thursday said his meeting with North Korean leader Kim Jong Un is set to take place in Singapore on June 12. The meeting comes on the back of easing tensions on the Korean Peninsula, with Kim having met South Korean leader Moon Jae-in in April.

The dollar index, which tracks the greenback against a basket of currencies, was softer following the release of U.S. inflation data on Thursday. The index firmed slightly to trade at 92.802 at 2:54 p.m. HK/SIN after touching as high as 93.42 earlier this week. Against the yen, the dollar traded at 109.31.

In corporate news, Australia's AMP fell 5.81 percent, underperforming other Australian bank shares. Its stock was downgraded to neutral from outperform by Macquarie Equities, Reuters said.

Suzuki Motor popped 8.96 percent after the automaker announced expectation-topping full-year operating profit on Thursday. Suzuki forecasts full-year operating income in the year ending March 2019 to come in at 340 billion yen ($3.11 billion).

— CNBC's Fred Imbert contributed to this report.