BANGKOK – Asian stock markets were choppy Friday after lacklustre U.S. economic reports raised expectations that the U.S. Federal Reserve would stick to its aggressive stimulus policies.
U.S. unemployment claims rose and first-quarter growth was revised lower Thursday, encouraging those investors who want to see the Fed continue its aggressive bond-buying strategy to support the U.S. economy. The Fed’s $85 billion-a-month purchases are aimed at spurring borrowing and lending and keeping interest rates low.
The efforts have boosted stock markets, where investors have turned for returns beyond what bonds are paying.
Japan’s Nikkei 225 clawed back 1.9 per cent at 13,832.65 after shedding more than 5 per cent the previous day. South Korea’s Kospi advanced 0.6 per cent to 2,012.05. Benchmarks in Indonesia and Taiwan also rose.
Still, some analysts said it was worrying how investors plowed into stocks despite the negative economic reports.
“It is concerning that markets are reacting to data this way. Bad news should be seen as bad news,” said Evan Lucas of IG Markets in Melbourne. “The concern from these reactions would be that once the Fed does start to wind back stimulus (whenever that might be) the markets themselves could unwind reasons for tapering.”
Hong Kong’s Hang Seng fell 0.3 per cent to 22,424.04. Australia’s S&P/ASX fell marginally to 4,927.90. Benchmarks in Singapore and mainland China also fell.
On Thursday, figures showed U.S. economic growth in the first quarter downgraded to an annualized rate of 2.4 per cent from 2.5 per cent, weekly jobless claims surprisingly up 10,000 and pending home sales rising by far less than anticipated in April.
On Wall Street, the Dow Jones industrial average rose or 0.1 per cent to close at 15,324.53 on Thursday. The Standard & Poor’s 500 index rose 0.7 per cent to 1,654.41. The Nasdaq composite index rose 0.7 per cent to 3,491.30.
Benchmark oil for July delivery fell 7 cents to $93.54 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents to close at $93.61 per barrel on the Nymex on Thursday.
In currencies, the euro was down slightly at $1.3040 from $1.3043. The dollar was nearly unchanged at 100.95 yen.
Follow Pamela Sampson on Twitter at http://Twitter.com/pamelasampson