Asian stock market: Shares buoyed by US tech bounce, payrolls in focus

Asian stock market: Asian shares were buoyed by a late bounce in US tech on Friday as results from Meta and Amazon beat expectations, while investors are bracing for US jobs figures, which could hasten bets for rate cuts if they come in below forecast.

Both quarterly results from Meta Platforms (META.O), opens new tab and Amazon.com (AMZN.O), opens new tab impressed investors, with their shares surging 15 per cent and 7 per cent in after-hour trading, respectively, adding a combined $280 billion in stock market value on Thursday. Apple (AAPL.O), opens new tab, however, fell 3 per cent after the close on disappointing China sales.

Nasdaq futures extended gains to be up 1 per cent, while S&P 500 futures rose 0.6 per cent. In Asia, Japan's Nikkei (.N225), opens new tab added 1 per cent, bringing the weekly gain to 1.7 per cent, while MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab also gained 1.1 per cent and was up 0.6 per cent on the week.

Hong Kong's Hang Seng index (.HSI), opens new tab jumped 1.5 per cent while China's bluechips (.CSI300), opens new tab eked out a modest gain of 0.1 per cent. All this will help wash over the flurry of worry around US commercial real estate and regional banks - at least for now - although that part of the market remains under pressure. The KBW Regional Banking index (.KRX), opens new tab fell 2 per cent, following its 6 per cent slide the day before.

Concerns about the health of regional lenders resurfaced after New York Community Bancorp (NYCB.N), opens new tab reported increased stress in its commercial real estate portfolio. "It does provide another bit of a headwind for sentiment within the equity market. But for the Fed, I think that at this stage it's not yet a concern that will tilt them or force them into some policy action," said Rodrigo Catril, senior FX strategist at National Australia Bank.

For now, investors are mostly waiting for US payrolls data on Friday. Economists expect the US economy added 180,000 new jobs in January, while the jobless rate ticked up to 3.8 per cent from 3.7 per cent.

That would come after a surprise jump in jobless claims and a weak private payrolls report. "If you look at the distributions of the survey, it actually has a significantly wide distribution, so there's a greater degree of uncertainty in terms of the outcome," said Catril from NAB. "Although yesterday Fed Chair Powell didn't think a March rate cut was likely, ultimately...the data will determine the case for when the Fed should start easing."

A downside miss in payrolls could bring a March rate cut back into play. Markets still see a chance of a March move at about 40 per cent, while the probability for a May move stood at 34 basis points - implying a 100 per cent probability of 25 basis points and some chance of a 50 basis-point easing.

Reflecting the still sizeable cuts to come this year - about 145 basis points priced in - and renewed jitters over regional US banks that added to safe-haven demand, US Treasury yields eased to the lowest this year and held steady in Asia.

Long-term Treasury yields held at 3.8802 per cent, after slumping 10 basis points to as far as 3.817 per cent, while rate sensitive two-years were steady at 4.204 per cent, having dropped 4 bps to a low of 4.134 per cent overnight.

The slide in yields pressured the US dollar, which fell 0.5 per cent overnight against its peers and stuck to the low end of its recent range at 103.02. The euro was buoyant at $1.0878, having lifted 0.5 per cent overnight after data showed underlying price pressures in the euro zone were still strong. The sterling perched at $1.2752, having rallied 0.5 per cent overnight after the Bank of England said it would trend carefully about rate cuts.

In energy markets, oil prices recouped some losses from the previous day after unsubstantiated reports of a ceasefire between Israel and Hamas helped eased supply concerns. Brent crude futures rose 0.7 per cent to $79.26 a barrel, after falling more than 2 per cent the previous day, and US West Texas Intermediate crude gained 0.6 per cent to $74.3 a barrel.
Safe-haven gold was flat at $2,054.78.