China’s GDP, Buyback Plans Fuel Asia Stock Gains

European equity futures remained stable as traders scaled back their expectations for Federal Reserve rate cuts.

Treasuries steadied after heavy selling on Thursday, which was prompted by new signs of strength in the US economy. Yields in Australia and New Zealand rose during Friday trading. I Photo: PhillipC Wikimedia Commons

Meanwhile, Asian stocks rose after China’s economic data exceeded expectations and details of a stock buyback program were announced. Gold reached a new record, Richard Henderson reported for Bloomberg News.

Shares in China and Hong Kong extended their gains after the People’s Bank of China (PBOC) announced a relending mechanism with an initial quota of 300 billion yuan ($42.1 billion) for bank loans to be used in share buybacks.

Earlier data showed that China’s gross domestic product (GDP), industrial production, and retail sales figures all surpassed estimates.

Treasuries steadied after heavy selling on Thursday, which was prompted by new signs of strength in the US economy. Yields in Australia and New Zealand rose during Friday trading, mirroring the Thursday movement in US government debt.

An index tracking Asian stocks was set for its first daily gain since last week, partly boosted by the performance of chipmakers following Taiwan Semiconductor Manufacturing Co.’s (TSMC) strong earnings report.

Shares of TSMC surged as much as 6.3% in opening trade. Equities in Japan erased earlier gains, while those in Australia and South Korea declined.

The PBOC is focusing on “cutting the cost of financing for the real economy so that it can help corporates and households to start leveraging again” and delivering more liquidity support, Peiqian Liu, an Asia economist at Fidelity International, told Bloomberg TV.