Asian stocks surge, matching Wall Street's rally, as recession fears recede

Most Asian equities rose on Friday, after an overnight gain on Wall Street as positive US economic data helped to alleviate fears of a recession, while betting on interest rate reduction remained active.

Wall Street indexes surged strongly on Thursday as robust retail sales data fueled optimism about the US economy. Softer inflation data from earlier this week also maintained markets expecting a 25 basis point rate drop in September.

U.S. stock index futures gained in Asian trading.

Japan's Nikkei leads Asia advances, poised for a stellar week

Japan's Nikkei 225 and TOPIX indexes outperformed the rest of Asia, increasing 3.2% and 2.5%, respectively. They were also the top performers in Asia this week.

Both indices were expected to gain between 7% and 8.5% this week as they recovered from four weeks of heavy losses, which also pushed them into the bear market.

Sentiment toward Japan rose this week following stronger-than-expected second-quarter GDP figures, which indicated the economy was expanding despite rising wages and household expenditure.

However, Japanese equities remained in a bear market that began last week, with JPMorgan analysts warning that recent advances were primarily driven by domestic buying, and that international investors were apprehensive about buying back into Japan.

Hong Kong markets rise on excellent profits; China lags

 
Hong Kong's Hang Seng index surged 1.6%, led by a roughly 8% increase in JD.com (HK:9618) (NASDAQ:JD) after the internet retailer reported considerably higher-than-expected June quarter earnings.

Alibaba Group (HK:9988) (NYSE:BABA) climbed 3.6% after missing earnings projections for the June quarter. The stock was bolstered by expectations that Alibaba may upgrade its Hong Kong listing to make it suitable for purchase by mainland Chinese investors later this month, potentially attracting a flood of inflows via the Southbound stock connect.

However, Chinese markets trailed as investors remained wary of domestic stocks due to mixed economic data. The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes both gained by roughly 0.1%.

Mainland The People's Bank of China's additional stimulus plans provided little boost to Chinese markets. The central bank will decide on its benchmark loan prime rate next week, after abruptly reducing it in July to stimulate economy.

Broader Asian markets climbed, as the reduced likelihood of a US recession and continued predictions on US interest rate decreases boosted risk-taking assets.

In catch-up trading, Australia's ASX 200 jumped 1.3%, while South Korea's KOSPI increased 1.8%.

Futures for India's Nifty 50 index indicated to a high opening, with the index also expected to gain substantially following a vacation on Thursday.