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Asian stocks muted before nonfarm payrolls; India rises on strong GDP outlook

Published 06/06/2024, 10:41 PM
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Investing.com-- Most Asian stocks moved little on Friday with focus squarely on upcoming U.S. nonfarm payrolls data, which is expected to provide more cues on when the Federal Reserve could begin cutting interest rates.

Indian stocks rose, outperforming a bulk of their peers after the Reserve Bank of India kept interest rates steady as expected, but flagged an improved outlook for the Indian economy.

Regional stocks took middling overnight cues from Wall Street, as investors hunkered down before the payrolls data, which is expected to provide definitive cues on the labor market and interest rates. 

U.S. stock index futures tread water in Asian trade. 

Still, appetite for risk-driven assets was somewhat buoyed by interest rate cuts by the Bank of Canada and the European Central Bank this week, which drummed up optimism over looser monetary conditions this year. 

Indian stocks extend recovery, RBI hikes GDP outlook

India's NSEI and BSESN indexes rose 0.5% and 0.7%, respectively, after the RBI kept its policy repo rate unchanged, but hiked its outlook for annual gross domestic product growth.

The RBI said it expected GDP in the current fiscal year at 7.2%, higher than its prior forecast of 7%.

Indian stock gains on Friday saw the two indexes trim a bulk of their weekly losses, although they were still trading lower for the week after plummeting from record highs.

Losses came after a BJP-led alliance clinched a much smaller majority in the 2024 elections, presenting a difficult third term for Prime Minister Narendra Modi.

Japanese stocks tick lower as BOJ prepares to tighten policy 

Japan’s Nikkei 225 and TOPIX indexes fell about 0.2% each, weighed by growing bets that the Bank of Japan will tighten monetary policy next week by lowering its bond purchases.

Governor Kauo Ueda reiterated plans for such a moved earlier this week, while signs of a rebound in Japanese inflation and improving wages also drove up expectations of tighter policy.

But other data released on Friday showed Japanese household spending fell more than expected in April, raising doubts over just how much headroom the BOJ had to tighten policy. 

Chinese stocks fall after mixed trade data

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.8% and 0.3%, respectively, on Friday, after mixed trade data from the country.

Losses in mainland stocks dragged Hong Kong's Hang Seng down 0.7%.

China’s exports rose much more than expected in May on robust industrial production and improving overseas demand.

But imports grew at a slower-than-expected pace, as local demand remained weak amid soft consumer spending.

Chinese stocks have remained largely rangebound in recent weeks, as optimism over an economic recovery in the country soured in anticipation of more stimulus measures from Beijing. 

Broader Asian stocks inched higher. Australia’s ASX 200 index rose 0.3%, while South Korea’s KOSPI added 0.7% in catch-up trade after a holiday on Thursday. 

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