Global stocks par weekly loss on China's tech rally: Market overview

(Bloomberg) — Global stocks pared their weekly loss as Chinese technology stocks rallied more than 10%, helping to offset some of the resistance in markets caused by the Federal Reserve’s interest rate hike.

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U.S. and European stock futures rose and a gauge of Asian shares headed for its biggest weekly jump since July. The gains in Chinese stocks came as investors continued to speculate on the possibility that Beijing could reverse its Covid-Zero policy. News that US auditors were ahead of schedule in on-site inspections of Chinese companies also bolstered sentiment.

Treasury yields were steady ahead of the US jobs report. A key segment of the curve on Thursday reached an extreme inversion not seen since the 1980s. Such curve inversions have a history of preceding economic declines, adding to market jitters ahead of the jobs data later on Friday.

Swaps that refer to future Fed meetings show an expected peak rate above 5.15% around mid-2023.

Japanese stocks were the biggest drag in Asia as investors in Tokyo played catch-up after Thursday’s holiday.

The dollar weakened against all major currencies and the offshore yuan jumped more than 1%.

Chinese stocks in Hong Kong headed for their best week since 2015 as a US audit of the nation’s companies showed signs of progress. The gauge of the city-listed shares rose about 12% for the week after unverified social media posts that claimed a committee was being formed to assess scenarios for exiting Covid Zero were circulated earlier.

“What we’re suggesting is that China in the future will model the reopening on the back of Hong Kong,” Jack Siu, chief investment officer for Greater China at Credit Suisse Group AG, said on Bloomberg Television. “We’re still at least nine months away from today to reopen.”

Elsewhere, oil rose as investors weighed a tightening outlook for energy supplies against lingering concerns about a global economic slowdown. Gold went up.

Key events this week:

Some of the major moves in the markets:

Stock up

  • S&P 500 futures were up 0.3 percent as of 2:41 p.m. in Tokyo. The S&P 500 fell 1.1% on Thursday

  • Nasdaq 100 futures rose 0.5%. Nasdaq 100 down 2%

  • Topix Index fell 1.4%

  • Kospi rose 0.5%

  • The Hang Seng rose 6.7%

  • The Shanghai Composite rose 2.6%

  • Euro Stoxx 50 futures rose 0.6%

  • Australia’s S&P/ASX 200 rose 0.5%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.4%

  • The euro rose 0.3% to $0.9782

  • The Japanese yen rose 0.2% to 147.94 per dollar

  • The offshore yuan rose 1 percent to 7.2591 per dollar

Cryptocurrencies

  • Bitcoin rose 0.7% to $20,387.36

  • Ether rose 0.7% to $1,552.09

Bonds

Goods

  • West Texas Intermediate crude rose 2.1% to $90.02 a barrel

  • Spot gold rose 1.1% to $1,647.53 an ounce

–With help from Tommy Utoslahti.

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