Stocks edge higher as recession fears stabilise

Asian equities gained on Friday as investor concerns about the imminence of a U.S. recession subsided. China's somewhat encouraging inflation statistics also served to lift spirits.

Regional markets, however, continued to point downward for the week after registering sharp drops at the start of the week.

Better-than-expected unemployment claims statistics fuelled optimism that the U.S. labour market was not in as terrible circumstances as previously anticipated, and Asian equities followed Wall Street's lead.

Compared to most of their Asian counterparts, China's Shanghai Composite and Shanghai Shenzhen CSI 300 indices increased by 0.3% apiece. This week saw a 0.8% decline in both indices, marking the third consecutive week of declines.

However, the nation's inflation numbers indicated some encouraging patterns. While producer price index inflation decreased more slowly than anticipated, consumer price index inflation increased more than anticipated.

It was unclear if China's deflationary tendency would be stably reversed, but the data suggested that the People's Bank's series of interest rate decreases through July were having some effect.

In recent weeks, sentiment towards Chinese markets has deteriorated as a result of a run of unsatisfactory economic data from China. The nation's benchmark indices were not far from six-month lows.

The two top-performing indices were the Nikkei 225 and TOPIX of Japan.

Although they had recovered most of their losses from early in the week, the two were still expected to lose around 1.5% this week.

As Bank of Japan representatives made an effort to temper the central bank's surprisingly hawkish statements from the previous week, Japanese markets began to rise.

The Japanese indices were also helped by bargain shopping in heavyweight tech firms and by strong earnings from giants like Tokyo Electron. Following better-than-expected profits in the June quarter, the stock saw a 1.7% boost as it signaled rising demand from the artificial intelligence industry.

(Sources: investing.com, reuters.com)