European stock futures climbed higher on Friday despite a decline in Asian stocks, spurred by the intensifying US-China technological rivalry that led Alibaba Group Holding Ltd. to abandon the listing of its $11 billion cloud unit. Traders remained attentive to the euro zone’s consumer prices due later in the day. Concurrently, concerns about a supply glut pushed oil towards a fourth consecutive weekly loss, leading it into bear market territory. Japan‘s 10-year yield reached its lowest level since late September amid speculation of short covering, following a decline in Treasury yields on Thursday. A soft economic data outlook in the US bolstered optimism that the Federal Reserve’s aggressive tightening cycle may be coming to a close.
Alibaba’s shares experienced a 10% decline, the most significant in a year, impacting benchmarks in Hong Kong and the mainland. The broader MSCI Asia Pacific Index also dipped but was still on track for a weekly gain of approximately 3%. Alibaba’s unexpected decision to scrap its cloud spinoff due to US restrictions on chip exports undermined the bull cases for the stock and exposed the challenges the company faces in justifying its $200 billion valuation.
In China, authorities instructed a select group of national lenders to cap interest rates on interbank funding, aligning with a significant cash injection aimed at calming the market following last month’s unexpected liquidity crunch. Berkshire Hathaway Inc., led by Warren Buffett, issued yen bonds at lower costs in its second Japan deal of the year, fueling speculation that the billionaire investor may increase his investments in the nation’s share market.
In India, regulators urged banks to enhance buffers for certain consumer loans to curb the surge in risky debt in the third-largest economy in Asia. Meanwhile, money-market fund assets reached an all-time high for the second consecutive week, driven by interest rates exceeding 5% and volatility in fixed-income markets, prompting investors to seek refuge in havens.
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