Asian stocks gain as dip buyers lift Wall Street

Asian stocks rose at the open, following Wall Street’s lead, where buyers stepped in after a brief retreat in technology shares and signs of a resilient US labor market boosted investor sentiment.
The Nikkei index in Japan and the Kospi South Korea jumped by around 1% at the open. Equity-index futures for the US fluctuated on Thursday after the tech-heavy Nasdaq 100 Index gained 0.7% and the S&P 500 rose 0.4% as dip buyers emerged following a tech-led selloff.

In other corners of the market, Treasuries mostly held their losses, with the yield on the 10-year at 4.15%. Oil steadied after two days of declines. Stocks in some of America’s top retail brands, from department stores to toymakers and apparel companies, rallied as a skeptical US Supreme Court raised hopes the sweeping tariffs may be lifted.


Following a brief pullback that raised concerns about stretched valuations, buyers returned as robust earnings momentum and encouraging private economic data pushed stocks higher. ADP Research Institute figures showed US companies added jobs in October, while a separate report from the Institute for Supply Management indicated services activity expanded at the fastest pace in eight months amid a surge in new orders.

“For investors with cash on the sidelines, the recent market pullback seems like a good time to buy, especially for investors with a longer time horizon,” said Robert Edwards at Edwards Asset Management. “Earnings are crushing it and growing faster than revenues, and that often leads to multiple expansion.”

For Treasury investors, the US Supreme Court hearing on the legality of tariffs the White House began enforcing this year, will be a focal point. The tariffs are behind a revenue surge for the federal government that helped narrow the deficit for the fiscal year that ended Sept. 30, progress that might be arrested by an unfavorable ruling.

The US Supreme Court appeared skeptical of President Donald Trump’s sweeping global tariffs, as key justices suggested he had overstepped his authority with his signature economic policy.

If the tariffs are reversed, the 10-year and the 30-year “are very vulnerable to a sudden and violent cheapening,” said John Brady, an interest-rates derivatives specialist at RJ O’Brien. The market will face “a not-nearly-as-good deficit situation.”

Treasuries fell after the US government signaled that larger auction sizes are on the horizon, while the signs of economic resilience hurt odds of a Federal Reserve interest-rate cut in December. Fed Governor Stephen Miran described the latest increase in employment at companies as “a welcome surprise,” but reiterated rates need to be lower.

In Asia, China raised $4 billion in its return to the international bond market. The Ministry of Finance sold $2 billion each of three- and five-year dollar notes, with no premium versus Treasuries for the former and just two basis points for the latter, according to a person familiar with the matter who requested anonymity discussing private matters.

Back to stocks, calm prevailed in the US, following a slide that knocked down several of the world’s biggest technology companies.

Concerns about a narrowing cohort of stocks driving equity gains have become louder, while a pivot in Fed commentary has put a dent in optimism over rate cuts. Technical indicators are increasingly flagging reasons for caution just as Wall Street chief executives warn about frothy valuations.

“Traders looking for fresh reasons to justify the lofty valuations that have carried markets this far were not finding too many compelling reasons. But they don’t want to sell either,” said Fawad Razaqzada at Forex.com.

With dip-buying being a major theme in equity markets, the downside has been limited after each pullback, he noted.

In commodities, gold rose as investors digested the US job data and the outlook for the Fed’s interest rate path. Elsewhere, oil extended a run of lackluster trading on a persistent outlook for oversupply.