Japan’s Nikkei jumped 2% on Thursday and is back within touching distance of a new 34-year high.
The S&P 500 on Friday hit the 5000-point level for the first time, even though bond yields rose and another Fed official urged patience on rate cut expectations – the timing of the Fed’s first move is slowly moving towards June from May.
The Asian economic calendar on Friday is light. There are no major data releases scheduled, although there is a chance Beijing could release January’s credit and lending figures.
Chinese stocks go into the holiday season on a much stronger footing than they were a week ago. They have jumped 5% this week, chalking up their best week in over a year on optimism surrounding Beijing’s efforts to support asset prices.
But it may just be a short-term bounce based more on stretched positioning and over-sold momentum indicators than a deeper-rooted improvement in economic or market fundamentals.
China bears will point out that the rebound is coming from a low base – a five-year low, to be precise – and only a week ago the main indices had slumped as much as 6%. Prices are back to where they were only a few sessions ago.
