Investing.com – Most Asian stocks rose on Friday, led by gains in the technology sector, as investors cheered strong earnings from Microsoft and Alphabet, although anticipation of new interest rate signals kept sentiment in check.
Japanese shares also rose comparatively less than their peers, with much of the focus on the conclusion of the Bank of Japan meeting later in the day. Softer-than-expected inflation data in Tokyo added to the uncertainty.
Regional markets saw US stock index futures rise sharply following stronger-than-expected earnings from tech giants Microsoft Corporation (NASDAQ:) and Alphabet Inc (NASDAQ:). Shares of both companies rose in the secondary market, with Alphabet hitting a record high.
Gains in U.S. technology stocks largely eclipsed a weak close on Wall Street overnight following softer-than-expected data and a higher . Attention was now focused on the data – the Federal Reserve’s preferred inflation gauge – due out later in the day.
Japan’s Nikkei 225 index creeps up, the focus of the Bank of Japan
The Japan index added 0.4%, while the overall index rose 0.2%.
Sentiment toward Japan was largely tempered by uncertainty ahead of the agreement. While the central bank is expected to keep rates steady, investors are unsure whether it will send hawkish signals in the face of rate easing.
Softer-than-expected inflation data from Tokyo further added to uncertainty. Inflation in the Japanese capital fell below the Bank of Japan’s annual target of 2% in April, giving the central bank less room to raise interest rates further.
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However, gains in technology stocks supported Japanese benchmark indices.
Asian tech sector upbeat after strong US earnings
Tech-heavy Asian exchanges outperformed on Friday. South Korea’s index rose 1%, while Hong Kong’s index gained 1.5%.
The Hang Seng Index also hit a five-month high on earnings from oil and gas giant CNOOC Ltd (HK:) after the company posted better-than-expected quarterly earnings.
Positive earnings from U.S. tech giants raised hopes that demand for artificial intelligence, which has been a key driver of earnings growth, will continue to support tech companies’ valuations in coming quarters. Growth in the technology sector also lifted the China index and indexes by 0.8% and 0.6%, respectively.
India index futures posted a positive opening, with local technology stocks also posting broader gains.
The Australian market was the only underperformer on the day, falling 1.3% in post-holiday catch-up trading on Thursday.
Australian shares were also spooked by data showing inflation rose in the first quarter, which portends higher interest rates in the country over the long term.