Asian stocks rise with BOJ in focus; China rebounds on stimulus hopes

Investing.com– Most Asian stocks rose on Wednesday with Chinese markets rebounding from five-month lows as middling economic data fueled bets on more stimulus measures, with focus now turning to a Bank of Japan meeting.

Japanese markets were held back by uncertainty over whether the BOJ will hike interest rates, while Asian technology and chipmaking stocks rallied, tracking strong earnings from Advanced Micro Devices Inc (NASDAQ:). 

Regional markets brushed off a weak overnight close on Wall Street, with U.S. stock indexes closing lower in anticipation of a Federal Reserve interest later in the day. 

But U.S. stock index futures rose in Asian trade, with a rally in chipmaking stocks largely offsetting a decline in heavyweight tech stocks, after Microsoft Corporation (NASDAQ:) missed some estimates with its June quarter earnings. 

Chinese stocks rebound, soft PMIs fuel stimulus bets 

China’s and indexes jumped over 1% each and were the best performers in Asia on Wednesday. Both indexes rebounded from their weakest levels since February, and were nursing steep losses through July. 

Purchasing managers index data for July showed sustained weakness in business activity, with the shrinking for a third straight month. 

But the reading ramped up bets that Beijing will be forced into unlocking more stimulus measures, especially after the government presented a supportive stance during the Politburo meeting on Tuesday. 

While the meeting yielded few actual details on the planned stimulus measures, investors took some encouragement from Beijing explicitly stating it will work to improve consumer confidence. 

Japanese stocks lag amid BOJ uncertainty 

Japan’s index fell 0.4%, while the fell 0.1% amid uncertainty over a , especially with analysts split over a hold or a 10-15 basis point hike. 

But an end to the central bank’s highly stimulative quantitative easing program is widely expected, given that the BOJ had signaled it will provide more details on cutting asset purchases during its July meeting. 

Reduced QE presents less liquidity for Japanese markets, which could undermine more strength in local stocks.

Asian tech, chipmakers surge despite Microsoft earnings 

Tech-heavy Asian bourses logged strong gains on Wednesday, with Hong Kong’s rallying 1.6%, while South Korea’s rose 0.5%. 

Tech stocks- particularly chipmakers, rose tracking strong earnings from AMD, which beat expectations and forecast strong revenue growth on demand from artificial intelligence.

But this trend was somewhat offset by middling earnings from Microsoft. While the firm’s profit beat expectations, the company’s cloud business- which is a barometer for AI demand- clocked slower-than-expected revenue growth. 

Among broader Asian markets, Australia’s index surged 1.3% and came close to a record high after data showed grew slightly less than expected in the second quarter. 

The reading ramped up bets that cooling inflation will keep the Reserve Bank of Australia from raising interest rates any further. 

Futures for India’s index pointed to a positive open, with the index remaining in sight of record highs above the closely watched 25,000 level.