Asian stocks log best week in months; dollar lurks below highs

TOKYO, July 22 (Reuters) – Asian stock markets recorded their best week in months on Friday and the dollar held off recent record highs after the European Central Bank (ECB) unexpectedly ended its negative interest rate policy, but U.S. futures fell on fears of poor tech earnings.

Ahead of the Europe open, FTSE 100 futures were up 0.13% while Euro STOXX 50 futures were down 0.3%.

Tech stocks dragged Nasdaq futures down 0.83% after Snapchat owner Snap Inc’s poor earnings release sounded the alarm among investors. S&P 500 futures were down 0.46%.

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Japan’s Nikkei (.N225) rose 0.37% on Friday to make gains for a seventh successive day. The index gained 4.17% this week, its best performance since March.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.17%, but the index is still set for its biggest weekly gain in about two months.

Australia’s AXJO (.AXJO) had its best week since March, up 2.83%, and South Korea’s KOSPI (.KS11) gained 2.68% for its best week since February.

The euro pared early gains to trade at $1.0188, but has gained about 1% the dollar this week. It’s the currency’s biggest weekly rise against the dollar since late May, after last week saw it dip below parity for the first time in almost two decades.

The ECB raised interest rates by a bigger-than-expected 50 basis points to zero percent overnight, its first hike in 11 years and ending a policy of negative interest rates that had been in place since 2014. read more

“While the ECB was never going to move by more than 50 bps – as we have seen from many other central banks – the 50 bp lift still came as a surprise to many,” said Susan Kilsby, an economist at ANZ, in a note. “But tightening rates quickly has now become the norm.”

Hong Kong’s Hang Seng index (.HSI) made early gains but was flat after China’s cybersecurity regulator fined Didi Global Inc $1.2 billion, potentially signalling an end to the regulatory crackdown and clearing a path for the ride-hailing giant to list in Hong Kong. read more

Economic pressure seems to be telling on U.S. counterparts, with Snap’s warning of the effect of a slowdown on internet companies causing the share price to plummet nearly 27% in after-hours trade. Twitter Inc (TWTR.N) will release its earnings later on Friday. read more

“As Meta found out earlier in the year, markets will severely punish richly valued tech stocks at the first sign of trouble,” OANDA senior market analyst Jeffrey Halley wrote in a note.

Leading cryptocurrency Bitcoin rose 0.14% to $23,161.42 and is up nearly 11% on the week, which would be its best week since March.

In foreign exchange markets, the dollar steadied on Friday after an overnight dip, with the dollar index up 0.4% to 106.960. The yen fell about 0.4% to 137.83 per dollar and the Aussie dollar eased 0.4% to $0.6980.

Oil prices rose Friday and looked set for their first weekly gain in more than a month. Brent crude futures were up 1.4% to $104.93 a barrel, and U.S. WTI crude futures rose 0.99% to $97.30.

The U.S. Federal Reserve meets to set interest rates next week and expectations of a 100 bp hike have faded in favour of pricing for a 75 bp move.

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Reporting by Sam Byford; Editing by Sonali Desai and Lincoln Feast.

Our Standards: The Thomson Reuters Trust Principles.

source: reuters.com