Asian stocks track Wall Street higher, Japan’s Nikkei leads gains

Most Asian stocks edge higher on Thursday following the S&P 500 closed at a record high of nearly 5,000. A strong US economy and Chinese initiatives to improve the nation's sentiment are driving the recovery of Asian equities.

At press time, China’s Shanghai was up 0.62% to 2,847, the Shenzhen Component Index rose 1.08% to 8,802, Hong Kong’s Hang Sang dropped 1.26% to 15,877, South Korea’s Kospi was up 0.16%, India’s NIFTY 50 was down 0.86% to 21,745, and Japan’s Nikkei led gains, rising 1.91% to 36,881. 

Japan’s December current account balance was lower than expected. Japan's Current Account surplus stood at 744.3 billion yen in December, compared with the expectation of a surplus of 1.02 trillion yen. Exports grew 9.4% YoY in December, while Imports fell 5.4% YoY on weaker domestic demand.

In China, the policymakers plan to bolster markets ahead of the long Lunar New Year holiday. The Chinese economy continues to face deflationary pressures, with consumer prices falling sharply for the first time in 14 years in January. This has increased pressure on officials to take more measures to boost the economy.

In India, the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.5% for the sixth consecutive time as inflation approaches the upper tolerance level of 6%.

Furthermore, the Bank of Thailand (BoT) left its benchmark interest rate steady for the second consecutive meeting on Wednesday, despite government pressure to lower borrowing rates to boost sluggish growth.

Looking ahead, traders will monitor the US weekly Initial Jobless Claims, Wholesale Inventories, and Fed’s Barkin (Richmond) speech. Mainland Chinese stock markets are set to close on Friday for the Lunar New Year and will reopen on Monday.