Asian stocks rise tracking Wall St rally as recession fears ease

Investing.com-- Most Asian stocks surged on Friday, tracking an overnight rally on Wall Street as strong U.S. economic data helped quell fears of a recession, while bets on interest rate cuts still remained in play. 

Wall Street indexes rose sharply on Thursday after strong retail sales data boosted optimism over the U.S. economy. Softer inflation data from earlier in the week also kept traders pricing in a 25 basis point rate cut in September.

U.S. stock index futures rose in Asian trade. 

Japan’s Nikkei leads Asia gains, set for stellar week

Japan’s Nikkei 225 and TOPIX indexes were the best performers in Asia, rising 3.2% and 2.5%, respectively. They were also the best performers in Asia this week. 

Both indexes were set to add between 7% and 8.5% this week, as they rebounded from four straight weeks of steep losses, which also saw them enter a bear market. 

Sentiment towards Japan improved this week on stronger-than-expected gross domestic product data for the second quarter, which showed the economy was picking up amid improving wages and personal spending. 

But Japanese stocks still remained within a bear market entered last week, with analysts at JPMorgan warning that recent gains were driven chiefly by domestic buying, and that foreign investors remained cautious over buying back into Japan.

Hong Kong stocks rally on strong earnings, China lags 

Hong Kong’s Hang Seng index rose 1.6%, buoyed by a nearly 8% surge in JD.com (HK:9618) (NASDAQ:JD) after the ecommerce retailer clocked much stronger-than-expected June quarter earnings.

Rival Alibaba Group (HK:9988) (NYSE:BABA) rose 3.6% even as its June quarter earnings missed estimates. The stock was boosted by speculation that Alibaba will upgrade its Hong Kong listing to make it eligible for buying by mainland Chinese investors later this month, which could attract a swathe of inflows for the stock through the Southbound stock connect. 

But Chinese markets lagged as mixed economic readings from the country kept investors averse to local stocks. The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes both rose about 0.1%.

Mainland Chinese stocks took little support from more pledges of stimulus from the People’s Bank of China. The central bank is set to decide on its benchmark loan prime rate next week, after unexpectedly cutting the rate in July to boost growth. 

Broader Asian markets advanced, as the diminished prospect of a U.S. recession and persistent bets on U.S. interest rate cuts supported risk-driven assets. 

Australia’s ASX 200 rose 1.3%, while South Korea’s KOSPI surged 1.8% in catch-up trade.

Futures for India’s Nifty 50 index pointed to a strong open, with the index also set to rise sharply after a holiday on Thursday.