Investing.com – Most Asian stocks rose on Thursday as major technology stocks mirrored gains in their U.S. peers and Japan’s Nikkei 225 index neared record highs even as the economy unexpectedly entered recession.
But while Japanese markets rose, growth in broader Asia was much more subdued as risk aversion still lingered amid easing bets that the Federal Reserve would cut interest rates early.
Regional markets got a boost from Wall Street, with US stocks closing higher overnight as continued hype around artificial intelligence and some strong earnings sent heavyweight tech stocks higher.
, and futures in Asian trading fell. Analysts say U.S. stocks are likely to suffer further losses following the release of better-than-expected inflation data on Tuesday.
Nikkei 225 close to record high as fourth-quarter recession prevents Bank of Japan from raising interest rates
The index rose 0.7% to 37,982.50 points, a 34-year high. The index was also close to its record high of 38,915, last seen in 1989.
The Nikkei index’s gains were led mostly by tech heavyweights, while chip makers and related companies posted significant gains on the artificial intelligence frenzy. Shares of technology investor SoftBank Group Corp. (TYO:) rose 2.4% to a nearly three-year high, and the chip testing equipment maker Advantest company. (TYO:) increased by 1.6% and Tokyo Electron Ltd. (TYO:) – Japan’s most valuable chipmaker – added almost 4%.
The broader fell 0.1%.
Data released earlier in the day showed Japan’s economic growth contracted unexpectedly in the December quarter as private consumption was hit by high inflation and a weak yen. Japan is entering a technical recession after GDP contracted for two straight quarters, data showed.
But the recession has heightened bets that the Bank of Japan will further delay raising interest rates from ultra-low levels, a trend that portends a long period of loose monetary conditions for Japanese markets. This trend has been a key driver of Japan’s stock market growth over the past two years.
Other Asian markets also rose due to growth in the technology sector. The Hong Kong index added 0.5% after a Bloomberg report showed Michael Burry, who famously called the 2008 subprime mortgage crisis, increased his holdings in tech heavyweights JD.com (NASDAQ:) (HK:) and Alibaba Group ( NYSE:) (GC:).
South Korean shares added 0.1%. Indonesian shares were the best performer of the day, rising 1.3% after Defense Minister Prabowo Subianto appeared poised to win the country’s presidency.
Australia added 0.7% as data showed it gave the Reserve Bank less incentive to raise interest rates further in January. However, the ASX’s gains were tempered by a 2.3% fall in miner BHP Group Ltd (ASX:) after it reported a staggering $5.7 billion impairment charge on its assets in Brazil and its Australian nickel business.
Indian index futures posted a muted opening, although local tech heavyweights look set to keep an eye on gains from their US peers.