Asian markets rise as beaten tech stocks enjoy respite from selling
Oil prices edged up but held recent losses fuelled by increased traffic through the Strait of Hormuz and on hopes for progress in US-Iran talks.
A man walks past an electronic quotation board displaying the Nikkei Stock Average on the Tokyo Stock Exchange along a street in Tokyo on Jun 25, 2026. (File photo: AFP/Kazuhiro Nogi)
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HONG KONG: Asian stocks rose on Friday (Jul 3) as tech firms enjoyed a much-needed reprieve from the heavy selling of recent weeks, with a big miss on US jobs creation soothing worries over a Federal Reserve interest rate hike.
Regional markets have been in traders’ firing line for some time as the prospect of higher borrowing costs – fuelled by a fresh inflation spike – and concerns about extended valuations have sparked questions about how far the AI equity boom has to run.
That has seen chip firms such as South Korea’s SK hynix and Japan’s Kioxia plunge from record highs, along with benchmark indexes in Seoul and Tokyo.
But the selling paused on Friday as investors welcomed data showing the US economy added less than half the jobs than forecast in June, while figures for the previous two months were also revised down.
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The readings suggested the labour market was not as strong as previously thought, and give the Fed some breathing room to hold off an expected rate hike for now.
Speculation has grown since the central bank’s June policy meeting that it will announce an increase this year, as new boss Kevin Warsh said price stability was his key goal, citing persistently elevated inflation.
In early trade, Seoul’s KOSPI was up more than 2 per cent – having tanked around 20 per cent from its Jun 19 record high – boosted by rallies in SK hynix and Samsung.
Tokyo was also up, along with Hong Kong, Shanghai, Sydney, Singapore, Wellington and Manila.
However, the likelihood of a hike before the end of the year remains.
“Not long ago, the Fed had an easing bias which was primarily fuelled by concerns over the labour market,” wrote Rodrigo Catril at National Australia Bank.
“Recent improvement in payrolls alongside higher inflation shifted the Fed bias towards neutral, with the new Fed Chair emphasising the need for the Fed ‘to re-commit to deliver price stability’.
“The US labour market today is not strong enough to instigate rate hikes but importantly is no longer a handbrake or impediment to hikes, leaving the Fed solely focused on the other side of its mandate.
“In other words, getting inflation down after five years of overshoot and six months of more recent core reacceleration.”
The gains in Asia followed a mixed day on Wall Street, where the Nasdaq sank 0.8 per cent but the Dow jumped more than 1 per cent on the last day before a long Independence Day weekend.
Analysts said the retreat in tech plays was unsurprising considering the eye-watering gains they have made over the past two years, while traders were rotating from the sector into other industries where bargains can be found.
The dollar held the losses seen in the wake of the jobs data as investors lowered their rate expectations, while non-yielding gold — which benefits from lower interest rates – climbed towards US$4,200 for the first time in two weeks.
Oil prices edged up but held recent losses fuelled by increased traffic through the Strait of Hormuz and on hopes for progress in US-Iran talks.
Source: AFP/rk
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