Asian Stocks Rise As The Fed Withdraws its Bets, But China Lags Due To Low Inflation

Most Asian stocks rose on Friday as weak U.S. labour data increased bets on a pause in the Federal Reserve's rate hike cycle, though disappointing Chinese inflation data limited broader gains.

As Fed pause bets rise, technology stocks lead gains.

Technology-heavy indexes such as South Korea's KOSPI and Taiwan's Taiwan Weighted index each rose 0.9% on Friday, as an unexpected increase in weekly U.S. jobless claims increased bets that the Fed will keep rates unchanged next week.

The Nikkei 225 and TOPIX in Japan were the best performers for the day, rising 1.7% and 1.3%, respectively, and returning to 33-year highs reached earlier in the week. Positive economic data from the country, most notably an upward revision to first-quarter GDP, aided sentiment towards domestic stocks.

Sentiment towards technology stocks was also boosted by a rush into artificial intelligence-exposed stocks, which are expected to increase significantly in value this year.

Chinese search engine giant Baidu Inc (HK:9888) (NASDAQ:BIDU), which has its own AI tool in development, rose 1.2%, while Japanese semiconductor testing equipment maker Advantest Corp (TYO:6857) added 1.1%.

A strong overnight finish on Wall Street gave local stocks a boost, as the S&P 500 entered a bull market after recovering from recent lows.

In early trade, Australia's ASX 200 rose 0.4%, while India's Nifty 50 rose slightly.

Chinese stocks fell as a result of low inflation and stimulus bets.On Friday, Chinese stock indexes trailed their Asian counterparts, with the Shanghai Shenzhen CSI 300 down 0.1% and the Shanghai Composite trading sideways.

Chinese stocks have largely wiped out all their gains this year as sentiment over a recovery-driven rally soured.

But further losses in local stocks were somewhat limited by bets that the Chinese government will roll out more stimulus measures this year to support growth. Anticipation of more interest rate cuts in the country grew after several major state-run banks cut rates on yuan deposits this week.