Asian Shares Gain On Rate Cut Optimism

(RTTNews) - Asian stocks advanced on Friday while the dollar and bond yields dipped as fresh signs of cooling in the U.S. labor market revived hopes for U.S. rate cuts this year. Nevertheless, the upside remained capped somewhat due to caution ahead of next week's crucial U.S. inflation data that could offer important clues on the Fed's rate trajectory.

The British pound recovered some ground, after having touched over two-week low on Thursday after the Bank of England signaled it will cut rates this summer if inflation stays low.

Gold and oil prices were set for weekly gains as Israeli forces advanced in the southern Gaza city of Rafah despite facing significant international criticism.

Chinese stocks ended on a flat note amid optimism around economic recovery and after reports that the Biden administration will update its China tariff regime as soon as next week.

The benchmark Shanghai Composite index finished marginally higher at 3,154.55.

Hong Kong's Hang Seng index jumped 2.30 percent to 18,963.68 after reports that regulators are considering a proposal to exempt individual investors from paying taxes on dividends earned from Hong Kong stocks bought via Stock Connect.

Japanese markets eked out modest gains as investors cheered positive earnings updates. The Nikkei average rose 0.41 percent to 38,229.11 while the broader Topix index settled 0.54 percent higher at 2,728.21.

Gaming stocks outperformed, with Konami Group surging 9.3 percent, Bandai Namco Holdings adding 5.6 percent and Nintendo rising 3.3 percent. Electrical equipment manufacturer Daikin Industries jumped 8.2 percent.

Seoul stocks closed higher, with the Kospi average rising 0.57 percent to 2,727.63 on hopes for U.S. rate cuts later this year.

Australian markets ended modestly higher, with banks and energy stocks leading the surge. The benchmark S&P ASX 200 inched up 0.35 percent to 7,749 while the broader All Ordinaries index settled up 0.36 percent at 8,022.70.

The big four banks rose between 0.4 percent and 1.3 percent. In the energy sector, Woodside Energy Group climbed 1.9 percent and Santos added 2.1 percent.

Across the Tasman, New Zealand's benchmark S&P NZX-50 index ended marginally higher at 11,755.17 after a survey showed tentative signs of recovery in the country's manufacturing sector in April.

Overnight, U.S. stocks posted strong gains as data showed the number of Americans filing new claims for unemployment benefits rose last week to the highest level in more than eight months, adding to expectations for rate cuts by the Federal Reserve in the coming months.

The Dow climbed 0.9 percent to extend its winning streak to a seventh straight session and reach over one-month closing high.

The S&P 500 gained half a percent and the tech-heavy Nasdaq Composite inched up 0.3 percent.