Asia Markets

Shares in Asia rise as European central bank delays rate hike

Key Points
  • Asia markets advanced on the day.
  • Shares rose on Wall Street overnight on hopes of a delay in the implementation of U.S. tariffs on Mexico.
  • Meanwhile, European Central Bank President Mario Draghi said Thursday it would delay its first post-crisis interest rate hike till at least the middle of next year.

Stocks in Asia advanced on Friday following positive developments overnight on U.S.-Mexico negotiations, while investors digested recent comments from major central bank chiefs.

The Nikkei 225 in Japan rose 0.53% to close at 20,884.71, with shares of robot maker Fanuc gaining 0.99%. The Topix index also advanced 0.49% to finish its trading day at 1,532.39.

In Australia, the gained 0.95% to close at 6,443.90 as most of the sectors rose. Over in South Korea, the Kospi rose 0.16% to end its trading day at 2,072.33.

The MSCI Asia-ex Japan index rose 0.11% to 501.99, as of 2:55 pm. HK/SIN.

Markets in China and Hong Kong were closed on Friday for a holiday.

Shares rose on Wall Street overnight on hopes of a delay in the implementation of U.S. tariffs on Mexico. The Dow Jones Industrial Average added 181.09 points to close at 25,720.66, bringing its gain for the week to more than 900 points and putting it on pace for its best week of the year. The S&P 500 gained 0.61% to end its trading day at 2,843.49 while the Nasdaq Composite gained 0.53% to close at 7,615.55.

Martha Barcena Coqui, Mexico's ambassador to the U.S., told CNBC on Thursday that negotiators had "a very good discussion, a very good debate." The U.S. had asked Mexico to keep Central American asylum seekers and require migrants without proper documentation to stay in Mexico "for the duration of their immigration proceedings," CNBC previously reported.

Meanwhile, European Central Bank President Mario Draghi said Thursday it would delay its first post-crisis interest rate hike till at least the middle of next year.

"The ECB's recent inaction in the face of rising downside risks to an already shaky economic outlook — not least from rising international trade tensions — has probably more to do with a lack of monetary policy tools, rather than with complacency," Silvia Dall'Angelo, senior economist at Hermes Investment Management, wrote in a note.

"For all the reassurances that its toolbox is plentiful, the ECB has little ammunition left to fight low inflation," Dall'Angelo said.

The euro last traded at $1.1260, after touching highs around $1.13 yesterday.

Draghi's comments come on the back of comments earlier this week from U.S. Federal Reserve Chairman Jerome Powell, who said Tuesday the central bank will "act as appropriate to sustain the expansion," opening the door to rate cuts.

"Through the end of next year, we're pricing four cuts basically, so there's a lot of easing priced — close to three cuts this year and then an additional cut next year," Robin Brooks, managing director and chief economist at the Institute of International Finance, told CNBC's Nancy Hungerford on Thursday.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.103 after slipping below 97.0 yesterday.

The traded at 108.48 against the dollar after touching 108.31 earlier, while the changed hands at $0.6973 after seeing an earlier low of $0.6965.

Oil prices gained in the afternoon of Asian trading hours, with international benchmark Brent crude futures rising 1.44% to $62.56 per barrel and U.S. crude futures advancing 1.37% to $53.31 per barrel.

— CNBC's Fred Imbert contributed to this report.

Correction: This report was updated to reflect that Robin Brooks, managing director and chief economist at the Institute of International Finance, spoke to CNBC on Thursday.