BY YURI KAGEYAMA
TOKYO (AP) – Asian stocks were mixed on Friday amid concerns about troubled Chinese real estate developer Evergrande and the pandemic.
Japan’s benchmark rose after Thursday’s National Day reopening, but stocks in South Korea and China barely changed.
Wall Street stocks rose broadly for the second straight day, reversing the week’s losses. Investors were pleased to have made it clear the day before from the US Federal Reserve that it is not on the verge of hike rates.
Evergrande Group’s announcement that it would make a payment due Thursday has helped allay concerns about its failure to meet its huge debt obligations.
Japan’s benchmark Nikkei 225 rose 1.9% to 30,200.89 in the morning session. South Korea’s Kospi gained less than 0.1% to 3,128.57. The Australian S & P / ASX 200 lost 0.4% to 7,338.50. Hong Kong’s Hang Seng was up 0.2% to 24,559.31, while the Shanghai Composite was down almost 0.1% to 3,639.88.
Mizuho Bank’s Masayuki Tsunashima warned that the markets remain at risk due to the potential problems at Evergrande. Prolonged coronavirus outbreaks also come with risks, he said.
“So it cannot be ruled out that optimism may remain fragile, or at least opportunistic, as the underlying risks have simply not been addressed, let alone put to bed,” he said. “And this is in line with the fact that the markets are still vulnerable to volatility and negative shocks.”
On Wall Street, stocks rose for the second straight day, reversing the strong pullback at the beginning of the week. The S&P 500 rose 1.2% to 4,448.98. More than 85% of the companies in the benchmark index posted gains.
The Dow was up 1.5% to 34,764.82 while the Nasdaq was up 1% to 15,052.24. The Russell 2000 rose 1.8% to 2,259.04. It’s up 1% for the week.
The rally put major indices on track for weekly gains for just four days after a wide sell-off on Monday brought the S&P 500 its biggest slide since May, pushing the Dow down more than 600 points.
The sharp fluctuations in the market reflect how quickly investor sentiment can change. As the market moves near all-time highs, traders tend to see sell-offs as buying opportunities.
Traders have been uncomfortable about how quickly the Federal Reserve might decide to curtail some of the support it has given to markets and the economy. Those worries were allayed on Wednesday when the Federal Reserve signaled that it would not consider cutting support like this until at least November and announced that it could raise its policy rate sometime next year.
“The past few days have just been the realization that the market has shrugged off all the things that were being talked about,” said Michael Antonelli, managing director and market strategist at Baird, noting that the S&P 500 was only about 1, 5%. below its all-time high from earlier this month.
“The market was just ripe for a sell-off,” said Antonelli on Monday. “We haven’t had a 5% decline from the highs this year.”
The Fed said it will likely begin slowing the pace of monthly bond purchases during the pandemic in an attempt to keep borrowing costs down “soon” if the economy continues to improve.
“The reality is that the Fed won’t pull anything on the inflation side until it has to,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company.
Still, the markets had a rough September and investors could expect more chopping off, said Schütte.
“People have gotten so used to a one-way market,” he said. “It’s going to be more of a two-way market and investors will have to get used to it, but I still think the trend is higher.”
In energy trading, the US crude oil benchmark in electronic trading on the New York Mercantile Exchange fell 27 cents to $ 73.03 per barrel. On Thursday it was up $ 1.07 to $ 73.30 a barrel.
Brent crude, the international standard, lost 24 cents to $ 77.01 a barrel.
In foreign exchange trading, the US dollar rose from 110.31 yen to 110.39 Japanese yen. The euro was priced at $ 1.1744, down from $ 1.1740.
AP business writers Damian J. Troise and Alex Veiga contributed to this.