Stocks in Asia up after Thursday’s Wall Street rally

As the Wall Street recovered some of the losses during the previous day, stocks in the Asia-Pacific region too traded higher on Friday – the last trading session of the year.

Hong Kong’s Hang Seng index rose 0.31 percent, carrying on the sentiment from the US session. In mainland China, the Shanghai Composite gained 0.51 percent to 3,089.26 and the Shenzhen Component added 0.18 percent to 11,015.99.

In Australia, the S&P/ASX 200 in Australia rose 0.26 percent to end its session at 7,038.7. In Japan, the Nikkei 225 was flat to end at 26.094.5 while the Japanese yen saw some strengthening to last stand at 132.42 against the US dollar.

Seoul’s stock markets are closed for New Year’s holiday and scheduled to resume trade on Jan 2 an hour later than usual at 10 a.m. local time.

Earlier, the US stocks jumped on Thursday with the Dow Jones Industrial Average up 345.09 points, or 1.05 percent, to 33,220.80, recovering nearly all of its losses from the previous session. The S&P 500 gained 1.75 percent to close at 3,849.28, and the Nasdaq Composite climbed 2.59 percent to 10,478.09.

The market pushed higher early Thursday after the US Labour Department reported an increase in jobless claims from last week, amid Federal Reserve efforts to cool the economy and in particular the labor market.

The Dow and S&P are slightly higher for the week, by 0.05 percent and 0.12 percent, respectively. The Nasdaq is on track for a 0.19 percent loss.

However, some experts described these gains an “abbreviated one-day version of a Santa Rally”, saying a rebound was overdue. They are expecting more volatility into the New Year with plenty of uncertainty about whether a soft landing is possible.

First-time filings for unemployment benefits totaled 225,000 for the week ended Dec 24, according to the report. That was an increase of 9,000 from the previous week and slightly above the 223,000 estimate from Dow Jones.

The market action follows a broad selloff during the regular session Wednesday as recession fears weighed on investor sentiment in a losing month and year. The Dow lost 365.85 points, or 1.1 percent. The S&P 500 fell 1.2 percent, while the Nasdaq Composite dropped 1.35 percent.

At the same time, the major averages are headed toward their worst year since 2008. The Dow has lost 8.58 percent, while the S&P 500 shed 19.24 percent. Meanwhile, the Nasdaq is the laggard of the three, down 33.03 percent as investors dumped growth stocks amid rising interest rates.

Investors are anticipating an economic recession to materialize early in 2023, as evidenced by the three quarters of projected S&P 500 earnings declines and continued defensive sector leanings,” Sam Stovall, chief investment strategist at CFRA Research, told CNBC.


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