Equities sluggish ahead of nonfarm payrolls

With all eyes on the impending U.S. nonfarm payrolls report, which is anticipated to offer additional hints about when the Federal Reserve may start lowering interest rates, most Asian markets saw minimal movement on Friday.

After the Reserve Bank of India maintained interest rates unchanged as anticipated and signalled a stronger prognosis for the Indian economy, Indian equities surged, exceeding most of their counterparts.

Wall Street's mediocre overnight indications for regional equities came as investors braced themselves for the payroll data, which is anticipated to offer clear signals on the labour market and interest rates.

Nevertheless, this week's interest rate cuts by the European Central Bank and the Bank of Canada raised hopes for looser monetary policy this year and helped to partially increase investor appetite for riskier assets.

The RBI increased its forecast for annual gross domestic product growth while maintaining the policy repo rate, which helped to boost the NSEI and BSESN indexes in India.

The RBI stated that its revised estimate of 7.2% GDP for the current fiscal year was higher than its previous estimate of 7%.

The two Indian stock indices recovered most of their weekly losses on Friday, but they were still trading down for the week after plunging from all-time highs.

The increasing speculation that the Bank of Japan may reduce its bond purchases next week in an effort to tighten monetary policy caused Japan's Nikkei 225 and TOPIX indices to decline.

This week, Governor Kauo Ueda reaffirmed intentions for such an action, and expectations of stricter policy were further raised by indications of a pick-up in Japanese inflation and rising wages.

However, further data that was made public on Friday revealed that Japanese household expenditure declined in April more than anticipated, casting uncertainty on the BOJ's exact amount of leeway to tighten policy.

Over in China, May saw a substantially greater increase in China's exports than anticipated due to strong industrial production and rising international demand.

However, import growth was less rapid than anticipated because of the poor local demand and low consumer expenditure.

As expectations for further stimulus measures from Beijing have tempered confidence in the country's economic recovery, Chinese equities have stayed mostly rangebound in recent weeks.

(Sources: investing.com, reuters.com)