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Asian equities rose Thursday following data indicating China’s economy is steadily recovering from COVID lockdowns earlier this year. Upbeat August retail sales and industrial figures boosted sentiment, though weak investment tempered enthusiasm. Japan shares rallied to near 33-year peaks while Australia’s benchmark index jumped.
China’s retail sales expanded 4.6% in August over a year earlier, exceeding projections of 3% growth. Industrial output grew 4.5%, also topping estimates. But fixed asset investment increased just 3.2% year-to-date, missing expectations. The mixed data showed China gaining momentum but still confronting economic hurdles.
In Asia trade, Hong Kong’s Hang Seng rebounded 1% as the Shanghai Composite slipped 0.28%. Japan’s Nikkei climbed 1.1% to 33,533, approaching July’s 33-year high. Australia’s S&P/ASX 200 rallied 1.29% to a six-week top. South Korea’s Kospi added 1.1% and the Kosdaq traded flat.
Overnight on Wall Street, the major indexes extended gains on cooler than forecast U.S. producer inflation. Signs of peaking price pressures buoyed hopes the Federal Reserve could slow its aggressive rate hike campaign. But stocks remain sharply lower in 2022 on recession worries.
SoftBank Shares Surge After Arm’s Strong Market Debut
SoftBank stock jumped over 3% after semiconductor firm Arm, which it controls, soared 25% on its first day of Nasdaq trading. The British chip designer priced its IPO at $51 per share, valuing Arm at over $54 billion.
SoftBank acquired Arm back in 2016 for $32 billion. The company’s energy-efficient chip designs power most smartphones globally. Bulls see diversification opportunities into growing markets like data centers and automotive semiconductors.
But bears argue slowing smartphone growth and uncertain future royalties present risks. SoftBank retains majority ownership after the IPO. Proceeds will help pare debt and fund new investments as SoftBank aggressively sheds assets.
Aerospace Giant Bell Sees India as Key Focus Market
Leading aerospace manufacturer Bell Flight views India as a top priority market, Managing Director Sameer Rehman said. He cited the country’s rapid economic growth and massive population size.
Bell has delivered 150 aircraft to China over the past five years. But the company now looks to expand its presence in India as demand for air travel and logistics services booms.
India’s defense spending has increased in recent years amid border tensions with neighbors. The country is upgrading military capabilities, offering opportunities to foreign suppliers. Expanding commercial aviation also requires more planes and helicopters.
Rising oil prices make aircraft vital for reaching remote areas in India lacking infrastructure. Bell sees significant potential despite fierce competition in India’s crowded aerospace arena.
Oil Prices Extend Rally on Positive China Data
Oil prices rallied to 10-month highs Thursday after Chinese retail sales and industrial output topped estimates, signaling recovering fuel demand.
Brent crude rose 0.92% to $94.56 per barrel while WTI crude jumped 1.02% to $91.08. August retail sales in China expanded 4.6% versus a year ago, beating forecasts of 3% growth. Industrial production grew 4.5%, also exceeding projections.
The better-than-expected figures eased concerns over a potential Chinese economic hard landing. But analysts cautioned stimulus measures may only provide temporary relief. Still, signs of stronger activity in the world’s number two oil consumer helped lift prices.
Oil has seesawed around $90 a barrel recently amid worries over recession risks and tight supplies. Disruptions from Russia sanctions, low inventories and OPEC+ output cuts have supported prices. But weaker demand outlooks due to slowing growth have capped gains.
K-Pop Agency Shares Sink After Blackpink Member Rejects Contract
Shares of South Korean K-pop label YG Entertainment plunged nearly 9%, its biggest one-day selloff since September 2022. The tumble came after reports that Blackpink member Lisa rejected a contract renewal offer worth over $37 million.
According to South Korean media, Thailand-born Lisa turned down two proposed deals from YG Entertainment. The terms would have positioned her among K-pop’s highest paid celebrities globally.
Blackpink stands out as one of the world’s most popular girl bands, driving billions of YouTube views. The quartet just finished a successful global concert tour. But losing Lisa would jeopardize Blackpink’s future as her contract expires in 2023.
YG Entertainment stock has cratered 50% this year amid controversies and missteps. Lisa’s surprise rejection fueled concerns over YG’s talent management practices. However, Blackpink’s massive fanbase limits the company’s leverage in contract negotiations.
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