Asia report: Most markets join tech rally, China lags

(Sharecast News) - Asia-Pacific equities mostly advanced on Thursday, tracking a rally in US technology stocks, though weakness in Chinese and Hong Kong shares tempered gains across the region. Investors also weighed global bond market pressures, with long-dated borrowing costs remaining elevated.

Patrick Munnelly, market strategy partner at TickMill, said "Asian markets stalled as a deepening selloff in Chinese stocks driven by regulatory crackdown concerns overshadowed earlier optimism about potential Federal Reserve policy easing sparked by disappointing US job openings data."

Most markets rise, China lags behind

In Tokyo, the Nikkei 225 rose 1.48% to 42,557.50, supported by technology names.

SoftBank Group climbed 6.45%, while optical cable maker Fujikura added 5.12% and Nvidia supplier Advantest gained 4.72%.

The broader Topix index advanced 1.03% to 3,080.17.

Sentiment was partly capped after shares of Nidec plunged more than 22% earlier in the session following news of a probe into alleged accounting improprieties.

Munnelly noted that "Japanese bond futures gained traction following a closely watched auction of 30-year government bonds, which saw demand levels broadly in line with the 12-month average.

"In Japan, investors expressed relief as the auction helped ease concerns about demand amid a global debt selloff."

Chinese equities extended losses despite the regional rally.

The Shanghai Composite fell 1.25% to 3,765.88, with heavy declines for Beijing Vantone Real Estate, Shanghai AtHub and Kunshan Kersen Science & Technology, all down 10.01%.

The Shenzhen Component slumped 2.83% to 12,118.70.

In Hong Kong, the Hang Seng index dropped 1.28% to 25,018.50, led lower by Zhongsheng Group, down 8.85%, WuXi AppTec, off 7.31%, and chipmaker SMIC, which slipped 6.67%.

South Korean stocks advanced, with the Kospi 100 up 0.43% at 3,238.97.

SK Innovation gained 4.93%, SK Square added 3.82% and Mirae Asset Daewoo Securities rose 3.19%.

The small-cap Kosdaq also climbed over 1%.

In Australia, the S&P/ASX 200 rose 1% to 8,826.50 after government data showed household spending increased 0.5% in July.

Mercury NZ led the gains, rising 6.13%, while Neuren Pharmaceuticals added 5.16% and Capstone Copper rose 4.96%.

New Zealand's S&P/NZX 50 advanced 0.45% to 13,133.20, with Serko up 6.72%, Oceania Healthcare 4.55% higher, and Vital Healthcare Property Trust up 3.16%.

In currencies, the dollar strengthened modestly, rising 0.19% against the yen to JPY 148.38, 0.27% on the Aussie to AUD 1.5325, and 0.19% against the Kiwi to change hands at NZD 1.7044.

Oil prices weakened, with Brent crude futures last down 0.92% on ICE at $66.98 per barrel, and the NYMEX quote for West Texas Intermediate also off 0.92% at $63.38.

Munnelly said "Treasuries and the dollar remained steady, while oil prices declined and gold retreated after a seven-day rally."

Australia household spending rises more than expected

In economic news, Australia's household spending grew at a faster pace in July, rising 5.1% year-on-year compared with 4.6% in the previous month, according to official data released Thursday.

The 0.5 percentage point increase slightly exceeded analyst forecasts of a 5.0% rise.

The stronger-than-expected outcome points to resilient consumer demand and was likely to provide a lift to retail and consumer goods sectors.

Economists noted that the data suggested a degree of confidence among households despite broader concerns over borrowing costs and global economic conditions.

Meanwhile, focus remained on the United States after weaker labour data added to expectations for Federal Reserve easing.

"The July JOLTS report provided further evidence of a cooling US labour market, with job openings declining faster than anticipated during the month," Munnelly said.

"This adds another reason for the FOMC to consider a rate cut in September."

He added that "US stock futures maintained their relief rally increase, as US investors felt more optimistic following remarks from Federal Reserve officials, including governor Christopher Waller, who affirmed their support for rate reductions in the upcoming months."

Reporting by Josh White for Sharecast.com.