(Sharecast News) - Asia-Pacific equities advanced on Thursday, led by record highs in South Korea and Australia as investors reacted to an upgraded global outlook from the International Monetary Fund and fresh signs of progress in US trade negotiations.
"Asian markets advanced as investors shifted their focus towards technology stocks, following a week dominated by concerns over a potential US-China trade war," said Patrick Munnelly, market strategy partner at TickMill.
"The MSCI index of regional shares climbed over 1%, with key indices in South Korea, Japan, and mainland China posting impressive gains."
Korea jumps on IMF outlook, other markets follow suit
South Korea's Kospi 100 index surged 2.9% to a record 3,975.57 after the IMF raised its 2025 growth forecast for the country to 0.9% from 0.8% in its October outlook.
The fund said the impact of US tariffs on global growth appeared to be "at the modest end of the range," citing private-sector adaptability and new trade agreements as key stabilising factors.
Sentiment was further buoyed by comments from US Treasury secretary Scott Bessent, who told CNBC that Washington was "about to finish up" trade talks with Seoul.
EcoPro Materials jumped 26.04%, LF Co rose 19.27%, and Posco Future M climbed 9.93%.
Munnelly noted that "this rally was partly driven by renewed interest in tech companies, spurred by Wednesday's positive news from Dutch chip-making giant ASML.
"The company's performance reignited optimism that the AI boom could continue to bolster corporate earnings."
He added that "Japan's Nikkei surged, driven by gains in chip and artificial intelligence-related stocks that lifted the index.
"The momentum picked up following record-breaking earnings reported by Taiwanese semiconductor giant TSMC."
Australia's S&P/ASX 200 gained 0.86% to a record 9,068.40 as weaker-than-expected labour market data bolstered expectations for further interest rate cuts.
The seasonally adjusted unemployment rate rose to its highest level in nearly four years, while employment growth undershot forecasts.
Financial and mining stocks led gains, with Hub24 up 10.53%, AMP rising 8.52%, and Genesis Minerals advancing 8%.
Japan's Nikkei 225 rose 1.33% to 48,307.00, supported by strong performances in technology and utilities.
SoftBank Group gained 8.59%, Renesas Electronics added 8.23%, and Tokyo Electric Power rose 5.09%.
The broader Topix index climbed 0.62% to 3,203.42.
Munnelly added that "political developments provided a boost, as fiscal dove Sanae Takaichi's campaign to become Japan's next prime minister regained traction," and that "Takaichi called on opposition party leaders from Osaka to back her in an upcoming parliamentary vote that will determine the country's next prime minister."
Mainland Chinese markets were mixed as the Shanghai Composite edged up 0.1% to 3,916.23, while the Shenzhen Component slipped 0.25% to 13,086.41.
Gains were concentrated in industrial and energy shares, with Shanghai Industrial Development, Henan Dayou Energy and Baotailong New Materials each climbing more than 10%.
"China's September CPI fell 0.5% year-on-year, slightly below expectations [for -0.2%], though deflationary pressures have eased recently," Munnelly observed.
"Core CPI rose to 1.0% on the year, a 21-month high, driven by gradual increases in services and non-food prices.
"The headline decline stems from falling food prices - notably pork and eggs - partly due to base effects, but this may reverse by year-end."
Hong Kong's Hang Seng Index dipped 0.09% to 25,888.51, weighed by declines in major technology and property names.
Xiaomi fell 3.6%, SMIC lost 2.76%, and Hang Lung Properties dropped 2.34%.
In New Zealand, the S&P/NZX 50 advanced 0.61% to 13,389.10, led by strength in infrastructure and property trusts.
Infratil rose 4.95%, Investore Property gained 4.92%, and Vital Healthcare Property Trust was up 3.24%.
In currency markets, the dollar strengthened against the yen and the Aussie, rising 0.18% to JPY 151.32 and 0.14% to AUD 1.5376, while slipping 0.19% from the Kiwi to change hands at NZD 1.7437.
On the energy front, Brent crude was last up 0.39% on ICE to $62.15 a barrel, and the NYMEX quote for West Texas Intermediate gained 0.51% to $58.57.
Australia labour market cools, core machinery orders decline in Japan
In economic news, Australia's labour market showed further signs of cooling in September as unemployment rose to its highest level in nearly four years, bolstering expectations that the Reserve Bank of Australia could cut interest rates next month.
Figures from the Australian Bureau of Statistics showed employment rose by 14,900, short of the 20,500 increase forecast by economists, but reversing August's 11,800 decline.
The unemployment rate climbed to 4.5% from a revised 4.3% in August, its highest since November 2021, as more people entered the labour force.
Hours worked increased by 0.5%, reflecting stronger full-time hiring, while the participation rate edged up to 67.0%, beating expectations of 66.8%.
In Japan, core machinery orders declined 0.9% month-on-month in August to JPY 8.89trn, extending weakness in capital spending indicators.
The result followed a 4.6% fall in July and missed expectations for a modest rebound of 0.4%.
Orders from non-manufacturers plunged 6.4% to JPY 469bn, while manufacturing orders slipped 2.4% to JPY 418bn.
The steepest falls were seen in goods leasing, chemicals, pulp and paper, and transport equipment.
On an annual basis, private-sector orders rose 1.6%, down from July's 4.9% increase and well below forecasts of 4.8%.
Reporting by Josh White for Sharecast.com.
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