By Ambar Warrick
Investing.com-- Japanese stocks led gains across Asia on Thursday after the country’s second-quarter GDP was revised higher, while losses in technology giant Tencent pulled Hong Kong’s main index lower.
Strength in business and consumer spending was the biggest driver of the reading, which now puts the Japanese economy above pre-pandemic levels. But rising inflation and interest rates have somewhat muddied Japan’s economic outlook for the remainder of the year.
A resurgence in COVID-19 cases is also expected to weigh on activity.
Broader Asian stocks also rose on Thursday, tracking an overnight rally on Wall Street as the dollar and Treasury yields retreated. But investors doubted whether the gains would last, given that the Federal Reserve is set to keep raising interest rates this year.
The central bank also expects the U.S. economy to remain “generally weak,” according to a Fed report released on Wednesday. Traders are pricing in a that the Fed will hike interest rates by 75 basis points later this month.
Tencent’s shares fell 2.4% to their lowest level in three weeks. But losses in the Hang Seng were limited by gains in other major technology stocks, which tracked their U.S. peers higher.
Tech was the biggest gainer in Wall Street’s overnight rally, benefiting from a slight dip in Treasury yields.
The Australian economy may be due for headwinds from a slowdown in China, which is a major market for commodity exports from the country.
Chinese stocks rose slightly on Thursday, amid continued concerns over an economic slowdown in the world’s second-largest economy. Data on Wednesday showed a bigger-than-expected decline in China’s trade surplus , amid waning exports and imports.
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