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US and Asian stocks hit record highs

Asian equity markets advanced on Friday, with stocks in Japan and South Korea climbing to record highs as investors looked past renewed military tensions involving Iran and instead focused on ceasefire optimism and record closes on Wall Street. US stocks closed at fresh records on Thursday, supported by hopes for a possible framework agreement between Washington and Tehran as well as upbeat AI-related company news. Oil prices edged lower on Friday and were set for sharp weekly declines as prospects for a US-Iran agreement eased concerns over near-term supply disruptions, while gold was slightly higher and the US dollar retreated.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

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Asian equity markets advanced on Friday as investors looked past renewed military tensions involving Iran and focused instead on ceasefire optimism and record US closes. South Korea’s Kospi rose 3.3%, hitting a fresh intraday high, while Japan’s Nikkei 225 climbed 2.7%. Australia’s S&P/ASX 200 added 1.4%, Hong Kong’s Hang Seng gained 0.8%, and mainland China’s CSI 300 was down 0.3%. Sentiment was supported by reports on Thursday that Washington and Tehran had largely agreed on the terms of a temporary deal to halt their three-month conflict, even as Iran reportedly launched missiles later that day. Technology shares also underpinned gains, with Samsung Electronics jumping nearly 6% after saying it had begun shipping samples of its latest high-bandwidth memory chips to customers worldwide.

Japan inflation slows in May

In macroeconomic data, Tokyo core inflation, which is used as a bellwether for national inflation, slowed to 1.3% in May, data showed on Friday, down from the previous month and remaining below the Bank of Japan’s 2% target. Separate figures showed Japanese factory output rose 0.9% in April from March, rebounding despite concerns over higher energy costs and supply-chain disruption linked to Middle East tensions. Retail sales in the nation increased 2.1% year-on-year in April, unchanged from March and stronger than the market had expected. The combination of softer inflation and mixed but resilient activity data is likely to support expectations that the Bank of Japan will normalise policy only gradually.

US stocks hit record highs

US stocks closed at fresh records on Thursday as hopes for a possible framework agreement between Washington and Tehran lifted sentiment, while upbeat AI-related company news added support. The S&P 500 rose 0.6% to 7563.63 points, the Nasdaq 100 gained 0.8% to 30,223.89 points, both hitting record highs. The Dow Jones Industrial Average was little changed at 50,668.97 points. Markets were encouraged by reports that US and Iranian negotiators had reached a preliminary understanding, although Iranian officials said no interim agreement had yet been finalised or confirmed. Individual shares also moved sharply, with software company Snowflake jumping 36.5% after results, Microsoft rising 3.5% ahead of next week’s developer conference.

US core PCE holds steady

US core personal consumption expenditures inflation was 3.3% in April, unchanged from March, while the headline rate stood at 3.8%, also matching the prior month, according to data released on Thursday. Core prices rose 0.2% from March and headline prices increased 0.4%, with goods prices lifted by a 5.5% jump in gasoline, while services prices climbed 0.3%. Separate data on Thursday showed first-quarter US economic growth was revised down to an annualised 1.6% from an initial 2%, reflecting weaker consumer spending and investment. Consumer spending still rose 0.5% in April, but personal income was flat, suggesting household demand remained resilient even as broader growth softened.

European shares retreat

European equities weakened on Thursday as investors assessed the fragility of the ceasefire in the Iran conflict, with the EuroStoxx 50 falling 0.3% after a moderate gain in the previous session. The Swiss Market Index dropped 0.9%. European technology stocks outperformed with a 1.1% gain. Defence shares also rose amid the geopolitical uncertainty, whereas Dutch payments group Adyen declined after its chief financial officer announced his resignation.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: French Consumer Price Index (08:45), French gross domestic product (08:45), Swiss KOF Economic Barometer (09:00), Swiss foreign currency reserves (09:00), German unemployment rate (09:55), Italian unemployment rate (10:00), Italian Consumer Price Index (11:00), Italian gross domestic product (12:00), German Consumer Price Index (14:00) and Canadian gross domestic product (14:30).

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