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Nikkei Markets

Nikkei Asia300 jumps as techs rise after robust US jobs data

Tencent leads gains in Hong Kong; TSMC and Largan boost Taiwanese shares

HONG KONG (Nikkei Markets) -- Asian stocks outside of Japan got off to a strong weekly start as positive signals from the U.S. bolstered technology companies, overpowering worries related to global trade tensions.

The Nikkei Asia300 Index gained 1.3% to 1,408.68, following a 0.5% drop last week. Heavyweight internet-services company Tencent Holdings climbed 2.7% in Hong Kong, while technology majors Taiwan Semiconductor Manufacturing Co. (TSMC) and Largan Precision added 2.2% and 4%, respectively, in Taipei. In Seoul, Hyundai Motor advanced 2.1% and Kia Motors jumped 5.8% to support the broader market while Samsung Electronics slipped 0.4%, halting a two-day winning streak.

All three U.S. equity indexes posted solid gains on Friday after the release of monthly government jobs data. The May report showed jobs growth of 223,000 positions, with hourly wages also edging higher and the unemployment rate dropping to an 18-year low. The strength of the U.S. labor market helped lift investor sentiment even as the data bolstered expectations that the Federal Reserve will raise interest rates later this month. Some analysts expect more rate increases to come at regular intervals down the road.

"The Federal Reserve is likely to focus on the rising risk of inflation in the economy, raising interest rates at its meeting next week, and each quarter this year and next," Richard Jerram, chief economist at Bank of Singapore, wrote in a report. "The Fed is under growing pressure to slow the economy down and limit the danger of overheating, with inflation already close to target."

As of Monday, there is a more than 91% probability that the Fed will lift its benchmark interest rates by 0.25 percentage points at a meeting next week, according to the CME's Fedwatch tool.

Investors appeared to look past worries about global trade that have often weighed on sentiment recently. In a statement issued over the weekend, Chinese authorities said the "economic and trade outcomes" of recent U.S.-China trade talks will not take effect if Washington proceeds with new import tariffs, according to a Xinhua News Agency report.

Property developers in Hong Kong, where interest rates move in tandem with the U.S. because of the local currency's peg to the dollar, posted broad advances. New World Development climbed 1.7% and CK Asset Holdings added 1.4%.

Stocks in India underperformed the region as banks and automobile companies retreated amid concerns local interest rates were likely to edge higher to contain inflationary pressures. HDFC Bank, the nation's largest by market capitalization, sank 3.1% and carmaker Maruti Suzuki India retreated 0.7%.

Dr Reddy's Laboratories climbed 2.4% after the U.S. Food & Drug Administration completed an inspection of a plant in the southern Andhra Pradesh state with zero observations, clearing the path for U.S. exports from the facility.

-- V. Phani Kumar

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