BENGALURU: Asian equities rebounded on Friday as investors welcomed softer-than-expected US jobs data that eased concerns about an imminent interest-rate hike by the Federal Reserve, with South Korean stocks surging 5percent.
The MSCI EM Asia index climbed 2percent during the day, largely driven by the jump in the tech-heavy KOSPI index, which triggered a “sidecar” trading curb in South Korea.
Chipmakers Samsung Electronics and SK Hynix added between 7percent and 9percent. The KOSPI’s rebound made up most of the index’s 8percent drop on Thursday, which had also triggered a sidecar curb, underscoring the AI-driven volatility in South Korean equity markets. A gauge tracking KOSPI volatility jumped to 90.96 from 84 the previous day. Stocks in Taiwan, the largest market by weight in the index, advanced marginally. TSMC, the world’s top contract chipmaker, traded slightly lower. Data released overnight showed US job growth slowed sharply in June and payroll gains for the prior two months were revised lower, pointing to a cooling labour market that dampened expectations of a near-term Federal Reserve rate hike.
Fed funds futures are pricing an implied 46.8percent probability that the US central bank will keep rates steady at its meeting on September 15 to 16, compared to a 35.8percent chance a day earlier, according to the CME Group’s FedWatch tool.
“Labour market data cooled modestly, allowing the market to hover in Goldilocks mode,” DBS analysts said in a note. “While the Federal Reserve tightening is priced as a base case, the urgency for tightening has diminished somewhat for the immediate term and should provide some comfort for sentiment.”
In Southeast Asia, Jakarta’s main equities gauge rose 2.6percent, while Thailand’s benchmark index added 1.7percent to a more than three-year high, mainly driven by Nvidia-supplier Delta Electronics Thailand, which rose around 3percent.
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