Asian equities pushed higher on Thursday as investors absorbed a record close on Wall Street and better-than-expected economic readings from China. Japan's benchmark advanced to a new peak, driven by a technology-heavy advance, while other regional markets showed varied moves amid lingering geopolitical and consumption-related questions.
Market drivers
U.S. markets ended the previous session at record highs, with the S&P 500 and the Nasdaq registering fresh peaks. The move on Wall Street was attributed to robust corporate earnings and increased hopes that tensions between the U.S. and Iran could ease through renewed diplomatic engagement. That improved risk sentiment carried into Asian trading.
Japan leads the rally
Japan's Nikkei 225 jumped 2.6% to an all-time closing high of 59,624.0 points, while the broader TOPIX climbed 1.3%. The advance was concentrated in technology and chip-related stocks, where investors are pricing in continued demand tied to artificial intelligence applications. Those segments led returns as traders positioned for further gains tied to AI-driven spending.
South Korea's KOSPI also saw strong gains, rising more than 2% and approaching the record levels it reached earlier this year.
China: growth beats but consumption uneven
Investor sentiment in the region received additional support from Chinese activity data. China's economy expanded 5.0% year-on-year in the first quarter, outpacing forecasts of a 4.8% rise and improving from a 4.5% gain in the prior quarter. That stronger GDP print was coupled with mixed monthly indicators released on Thursday.
Industrial production in China rose 5.7% in March from a year earlier, topping expectations of a 5.4% increase. Retail sales, however, grew 1.7% in March, below the 1.9% analysts had expected. The retail figure highlights ongoing softness in domestic consumption even as overall growth picked up.
Equity reaction in mainland markets was modestly positive: the Shanghai Composite gained 0.4%, and the blue-chip Shanghai Shenzhen CSI 300 added 0.7%. Hong Kong's Hang Seng climbed by more than 1%.
Other regional moves and labour data
Singapore's Straits Times Index slipped 0.2%, and futures tied to India's Nifty 50 were trading flat, indicating a more muted response in those markets. In Australia, labour market data pointed to a steady unemployment rate at 4.3% in March, with overall employment rising modestly and full-time job gains remaining strong. Despite those signs of resilience, Australia's S&P/ASX 200 edged 0.2% lower, bucking the broader regional rally.
Geopolitical and market risks
Risk sentiment has been bolstered recently by hopes of progress in U.S.-Iran discussions, which has eased some concerns over potential energy supply disruptions and inflationary pressure. At the same time, Washington has imposed a sweeping naval blockade targeting Iranian ports, with U.S. forces enforcing restrictions on vessels entering or leaving Iran and deploying significant naval assets near the Strait of Hormuz. These developments remain a source of market uncertainty, particularly for energy-sensitive sectors.
Overall, the regional market moves reflected a combination of stronger cyclical data from China, concentrated strength in technology and chip stocks tied to AI demand, and ongoing geopolitical considerations that could influence energy markets and broader risk appetite.