Asia shares hit over three year high
Asia shares hit their highest level in more than three years on Friday as they tracked a Wall Street rally, but the U.S. dollar struggled on concerns about the Federal Reserve’s independence and expectations for early rate cuts.
Stock indexes worldwide look set to end the week on a positive note, with worries about tensions in the Middle East and uncertainty over tariffs and trade deals on the backburner for now.
MSCI’s broadest index of Asia-Pacific shares outside Japan hit its highest level since November 2021 early in the session, while the gauge of stocks across the globe hit another record high for the fourth straight session.
EUROSTOXX 50 futures and DAX futures were both up more than 0.5 percent, while FTSE futures were little changed.
European shares rise
European shares rose on Friday as investors assessed signs of easing trade tensions between the United States and China, lifting hopes of further trade deals before the deadline for U.S. tariff pause is lifted in July.
The pan-European STOXX 600 index advanced 0.6 percent at 540.67 points, as of 0707 GMT. The index was on track to log its first weekly gain in three weeks. Other major regional indexes also traded higher.
A White House official said on Thursday that the U.S. reached an agreement with China on how to expedite rare earths shipments to the United States.
With worries about tensions in the Middle East taking a backseat for now, investor focus is on signs of progress on new trade deals before a respite on higher tariffs threatened by U.S. President Donald Trump expires in early July.
EU leaders discussed new proposals from the U.S. on a trade deal at a summit in Brussels on Thursday.
Australian shares wipe out early gains
Australian shares gave up early gains to close lower on Friday, as losses in heavyweight financials offset a rise in mining stocks, but the benchmark still posted a weekly gain.
The S&P/ASX 200 index ended 0.4 percent lower to finish the session at 8,514.2 points after rising as much as 0.6 percent in the early hours of trade.
The benchmark gained 0.1 percent for the week and was poised to log its third consecutive monthly gain.
Banking stocks fell 1.5 percent after hitting a fresh peak for the fourth straight session, with the “big four” banks losing between 1.6 percent and 2.8 percent. However, the sub-index marked its strongest week in nearly a month.
“Financials have taken a breather after a strong run. This looks like a classic case of profit-taking rather than a shift in fundamentals — banks remain well-supported by stable credit conditions and a resilient domestic economy,” said Hebe Chen, market analyst at Vantage Markets.
Japan’s Nikkei ends at 6-month high
Japan’s Nikkei share average closed at a six-month high on Friday, as technology stocks tracked Wall Street’s robust finish overnight.
The Nikkei jumped 1.43 percent to 40,150.79, its highest closing level since December 27. The index rose 4.6 percent for the week, its sharpest weekly gain since the week of September 23, 2024.
The broader Topix rose 1.28 percent to 2,840.54, gaining 2.5 percent for the week.
“Investors finally became willing to make long positions on U.S. stocks, underpinned by positive news around easing tensions in the Middle East and expectations for the interest rate cut,” said Takamasa Ikeda, senior portfolio manager at GCI Asset Management.
“Japanese equities mirrored the U.S. trend, led by stocks which are popular among foreign investors.”
Overnight, Wall Street finished higher, with the S&P 500 and the Nasdaq just shy of record closing highs as the Israel-Iran ceasefire continued to hold and a raft of economic indicators appeared to support the case for the Federal Reserve lowering borrowing costs this year.
South Korean shares fall
South Korean shares extended declines for a second session on Friday on profit-booking following a recent rally on post-election policy hopes, but still posted a fifth straight weekly gain.
The benchmark KOSPI closed down 23.62 points, or 0.77 percent, at 3,055.94.
For the week, the KOSPI rose 1.1 percent. It has gained 13.3 percent so far this month.
“The market fell broadly on profit taking as current stock prices are not cheap in terms of valuation,” said Seo Sang-young, an analyst at Mirae Asset Securities.
South Korea’s exports likely rebounded in June on the back of strong technology demand, following a decline in May, a Reuters poll showed, though economists remain wary amid uncertainty over U.S. tariff policy.
Among index heavyweights, chipmaker Samsung Electronics rose 1.00 percent, while peer SK Hynix lost 3.07 percent. Battery maker LG Energy Solution slid 3.03 percent.
Hyundai Motor and sister automaker Kia Corp were down 2.15 percent and down 1.41 percent, respectively. Steelmaker POSCO Holdings shed 2.80 percent, while drugmaker Samsung BioLogics fell 0.30 percent.
Indian equity benchmarks muted
India’s equity benchmark indexes were little changed in early trade on Friday, as a dip in heavyweight financials at near record highs offset a broader rally fueled by upbeat global cues.
The Nifty 50 added 0.07 percent to 25,569.4 points and the BSE Sensex rose 0.08 percent to 83,834.11 as of 10:15 a.m. IST.
“The Nifty’s breakout above its recent consolidation indicates rising optimism among traders,” said Aakash Shah, technical research analyst at Choice Broking.
Nine of the 13 major sectors advanced. However, financials and banks lost 0.6 percent and 0.4 percent, respectively, after climbing to record highs a day earlier.
Private lender HDFC Bank, the heaviest stock on the benchmarks, fell 1 percent, and was on course to snap a three-session winning streak in which it gained 3.8 percent.
IT companies, which earn a significant share of their revenue from the U.S., rose 0.8 percent on expectations of an early rate cut by the Federal Reserve and reports of a U.S.-China agreement on rare earth shipments.