The Nikkei 225 Index jumped 1.1% to close at 31,950 while the broader Topix Index surged 1.6% to 2,322 on Thursday, hitting their highest levels in at least two weeks and tracking a tech-led rally on Wall Street overnight, as risk appetite returned to the markets after the US Federal Reserve kept interest rates unchanged and the 10-year US yield fell to a two-week low. Still, the Fed left the door open to further monetary tightening, but growing recessionary fears prompted traders to bet on potential rate cuts. Japanese shares rallied initially this week after the Bank of Japan pledged to patiently maintain its accommodative monetary policy and only made minor adjustments to yield curve controls. Nearly all sectors advanced, with strong gains from index heavyweights such as Toyota Motor (1.8%), Keyence (2%), Tokyo Electron (3.3%), Advantest (10%) and Oriental Land (3.4%). Japanese markets will be closed on Friday for a holiday.
The Shanghai Composite rose 0.71% to close at 3,031 while the Shenzhen Component gained 1.22% to 9,854 on Friday, erasing losses from the previous session and taking cues from a strong lead on Wall Street overnight amid growing expectations that US interest rates have peaked and as Treasury yields dropped further. Domestically, investors digested data showing Chinese services activity remained expansionary and improved marginally in October. Technology and new energy stocks led the advance, with strong gains from OFILM Group (10%), Zhongji Innolight (3.1%), iFLYTEK (3.7%), IEIT Systems (3.9%), Longi Green Energy (2.1%) and Contemporary Amperex (1%). The Shanghai and Shenzhen indexes gained 0.4% and 0.9%, respectively, this week, rising for the second straight week.
The BSE Sensex rose 0.4% 64,364 on Friday, buoyed by the Federal Reserve's decision to maintain interest rates and strong domestic quarterly earnings results. Notable corporate highlights included rubber products company MRF, which reported a remarkable fivefold increase in Q2FY2024 profit, attributed to significant improvements in operational performance. Zomato also surprised with a second consecutive quarter of profit, backed by a 71% revenue surge. Among individual Sensex stocks, Titan led the way with a 2.2% increase, driven by better-than-expected Q2 profits, primarily due to robust jewelry demand. Tata Motors followed suit, rising 1.7% after reporting stronger Q2 profits and raising outlook on margins for its luxury car division, Jaguar Land Rover. Meanwhile, the Nifty 50 rose 0.5% to 19,231, pushed by a 5.5% jump of Apollo Hospitals Enterprises, after Morgan Stanley estimated 25% upside in stock prices over next 12 months. For the week, the BSE Sensex edged up by 0.9%.
Wall Street built up on the week's gains on Friday, as the S&P 500 and the Nasdaq added 0.9% and 1.4%, respectively, while the Dow Jones closed 222 points higher, after the jobs report showed the US labor market cooled more than expected last month. Nonfarm payrolls fell more than expected, the unemployment rate edged higher and wages rose slightly less than forecasted, reinforcing bets the Fed is done with rate hikes. Real estate, financials, and materials were the top performers. On the other hand, the tech sector struggled, led by a 0.5% fall in Apple shares after its earnings and revenue beat forecasts but sales declined for a fourth consecutive quarter and the company said it expects the December quarter revenue to “be similar to” last year’s. On the week, the Dow Jones jumped 4%, to book its best weekly performance since October 2022. The S&P 500 soared 4.7% and the Nasdaq soared 5.1%, marking their best week since November last year.
