Asian stock markets show mixed results with Wall Street hitting record highs and technology firms leading the gains, while concerns over Chinese economy and Australian mortgages highlight the complex global economic landscape.
On Friday, Asian stock markets had a mixed performance, despite positive movements on Wall Street, where the S&P 500 achieved a new record high for the third consecutive day, largely driven by gains in technology and chipmaker companies. Japan’s Nikkei 225 momentarily surpassed the 41,000 mark before experiencing a slight pullback. Contrarily, stock indices in Shanghai and Hong Kong faced declines, particularly impacted by the struggles of Chinese property and technology firms.
In particular, chipmaker companies such as Micron and Broadcom were noted for their significant contributions to the S&P 500’s rise, with Micron experiencing a notable uptick following a strong quarterly report attributed to the demand for artificial intelligence (AI) technology. The day also saw the debut of Reddit as a publicly traded company, which enjoyed a substantial increase of 48.4%, standing in contrast to Apple which faced a decline of 4.1% amidst news of an antitrust lawsuit.
European markets responded to the Bank of England’s decision to hold interest rates steady amidst dropping inflation, while Wall Street kept an optimistic outlook, anticipating potential Federal Reserve rate cuts as early as June. This comes amid the market’s interest in upcoming US personal consumption and expenditures data for further insights into inflation trends. Additionally, early trading showed a slight decrease in oil prices and changes in currency values, with the dollar experiencing decreases against the yen and euro.
In a report released by the Reserve Bank of Australia, it was revealed that around 5% of Australian mortgage holders are currently spending more than their income, largely due to increased interest rates and the heightened cost of living. Despite the financial strains on some borrowers, particularly those with variable-rate loans, the majority have been able to keep up with their debt repayments. The report suggests an optimistic outlook, predicting an improvement for borrowers by the end of 2025, influenced by moderating inflation, rising real wages, and a potentially lower interest rate environment.
The strong labor market in Australia is highlighted as a key factor supporting household incomes, which, alongside existing savings for many facing cash flow deficits, helps maintain low levels of housing loan arrears. However, the report does caution about potential risks from external factors such as the state of the Chinese economy and international economic uncertainties, which could impact Australia’s financial stability and economic prospects.
