Asian Stocks Up as Strong Apple Earnings Boost Sentiment, Volatility Remains

By Gina Lee

– Asia Pacific stocks were mostly up on Friday morning, clawing back some of the losses from the previous two days. These losses were driven by the U.S. Federal Reserve signaled a tighter monetary policy.

Japans Nikkei 225 jumped 2.04% by 9:01 PM ET (2:01 AM GMT). Data released earlier in the day showed that the Tokyo core consumer price index grew 0.2% year-on-year in January.

South Koreas KOSPI was up 0.79%.

In Australia, the ASX 200 rose 1.53%, with the producer price index growing 1.3% quarter-on-quarter and 3.7% year-on-year in the fourth quarter of 2021. Investors also await the Reserve Bank of Australias policy decision, which will be handed down in the following week.

Hong Kongs Hang Seng Index fell 0.79%. The city on Thursday shorted the quarantine period for arrivals from 21 to 14 days but extended current social distancing measures until Feb. 17.

Chinas Shanghai Composite was down 0.44% while the Shenzhen Component rose 0.81%.

Moves in Asia were somewhat subdued overall ahead of the upcoming Lunar New Year holidays.

U.S shares also rallied on Thursday, boosted by strong Apple Inc. (NASDAQ:AAPL) earnings. However, they ended a volatile session lower, after again failing to hold intraday rallies. U.S. Treasuries were steady and the yield curve flatter.

Investors are still digesting the Fed‘s latest policy decision, handed down on Wednesday. Money markets are now pricing in as many as five Fed hikes in 2022 in line with the U.S. central bank’s hawkish tone, up from the three expected as recently as December 2021.

The prospect of reduced COVID-19-era stimulus, from the Fed and other central banks globally, has introduced volatility into the market. Global shares have lost over $7 trillion in January to date.

“Really what we are seeing is historic intraday volatility... its been a pretty amazing ride so far this year,” Susquehanna International Group co-head of derivatives strategy Chris Murphy told Bloomberg.

In U.S. data, released on Thursday, the GDP grew a better-than-expected 6.9% quarter-on-quarter in the fourth quarter of 2021. Core durable goods orders grew 0.4% month-on-month in December, while Americans filed 260,000 initial jobless claims over the past week.

Meanwhile, pending home sales contracted 3.8% month-on-month in December.

Further data, including the Core Personal Consumption Expenditure Price index, as well as the Michigan consumer expectations and sentiment indexes for January, are due later in the day.