Investing.com — Most Asian stock markets fell on Friday, capping a week marked by weak economic data and a deteriorating outlook for the year, although Japan’s Nikkei outperformed its peers with a string of strong earnings.
The index jumped 0.9% to its highest level since late December, buoyed by strong earnings from Nissan (OTC:) Motor Co., Ltd. (TYO:) and Honda Motor Co Ltd (TYO:), which rose 4% and 5%, respectively.
Automakers added to a string of strong Japanese results this week, with surprise beats from companies such as Toyota Motor (NYSE:) Corp (TYO:) and Nintendo Co Ltd (TYO:), while the nation’s five largest trading houses posted bumper profits.
But shares of investment giant SoftBank Group Corp. (TYO:) fell 3% after the company posted a second consecutive annual loss.
The strong Japanese earnings streak shows that the economic headwinds of slowing growth and high inflation have so far had a limited impact on corporate earnings, indicating that the Japanese economy continues to operate in a stable manner.
The Nikkei was also supported by recent signals from the Bank of Japan that it plans to maintain its ultra-dovish monetary policy for the time being.
But Japanese stocks were the outlier on Friday, with most other Asian markets trading lower on worries about slowing growth in the world’s biggest economies.
China and the indices fell 0.6% and 0.4%, respectively, as disappointing trade and inflation data this week raised more doubts about a potential post-COVID economic rebound in the country this week. year.
While Beijing is likely to release more stimulus to support economic growth in the coming months, a series of data released this month showed the Chinese economy cooling after an initial rebound in the first quarter.
China’s weakness also bodes ill for broader Asian economies with high trade exposure to the country.
Hong Kong’s index fell 0.1% on Friday, while South Korea’s lost 0.5%.
Australia’s index fell 0.2%, dragged down by losses in heavy mining stocks as concerns over China triggered a crash in metal prices.
Broader Asian markets plunged as weaker-than-expected markets heightened worries about a possible recession. But the persistent inflation data has also seen markets reverse their expectations for any potential interest rate cuts by the Fed this year.
With US interest rates now likely to stay higher for longer, any major upside in Asian markets should be limited as investors steer clear of high-risk assets.
