Asian equities traded with limited direction on Thursday, May 1, as traders in Japan and Australia reacted to overnight turbulence on Wall Street sparked by soft US GDP data.
Concerns over a potential recession in the US economy set the tone for a choppy session, with trading volumes across the region muted due to Labour Day holiday closures in key markets including China, Hong Kong, India, and South Korea.
Japan’s Nikkei surges over 1%
The Nikkei 225 closed 1.22% higher, reaching its highest level in a month, supported by strength in real estate, banking, and textile stocks.
The index closed at 36,486.50, extending its winning streak to the sixth straight session.
Investors shrugged off US recession fears and focused on domestic corporate earnings and bargain hunting.
Among the top performers, Sumitomo Dainippon Pharma surged 13.6% to a 52-week high, while Central Japan Railway gained 9.76%, and Advantest Corp. rose 6.89%.
On the downside, Murata Manufacturing plunged 12.8%, leading losses amid broader weakness in select tech names. Kansai Electric Power and Toho Co. also declined, falling 5.7% and 5.09%, respectively.
The Nikkei Volatility Index dropped 5.48% to 27.23, hitting a one-month low, reflecting some easing of near-term market stress.
Australia’s ASX 200 continues winning streak
In Sydney, the S&P/ASX 200 rose 0.24%, also closing at a one-month high, lifted by gains in the information technology, A-REIT, and consumer staples sectors.
The index continued its winning streak for the sixth consecutive session.
Platinum Asset Management led the index with a 12.28% gain, followed by Wisetech Global, up 6.61%, and Mesoblast, which rose 4.74%.
However, gains were capped by losses in gold and industrial stocks. Westgold Resources fell 6.73%, while Austal and Lynas Rare Earths dropped 3.77% and 3.38%, respectively.
Wall Street on Wednesday
After a sharp decline early in the session, US stocks recovered significantly through the day on Wednesday, with the major indexes closing mixed.
The Nasdaq ended the session down 14.98 points, or 0.1%, at 17,446.34.
In contrast, the S&P 500 rose 8.21 points, or 0.2%, to 5,569.06, and the Dow gained 141.74 points, or 0.4%, to finish at 40,669.36.
Markets opened lower as investors reacted to data from the Commerce Department showing the US economy contracted by 0.3% in the first quarter of 2025, compared to a 2.4% expansion in the previous quarter.
The decline surprised economists, who had expected a 0.4% increase.
The drop in GDP was largely driven by a 41.3% surge in imports, subtracted from GDP calculations, as firms moved to front-load purchases ahead of new tariffs.
Imports alone took 5.0 percentage points off the headline figure.
A decline in government spending also weighed on growth, though gains in investment, consumer spending, and exports helped offset some of the weakness.
Additional pressure came from ADP data showing private sector employment rose by just 62,000 in April, well below expectations.
Despite the weak data, selling pressure eased later in the session, with some investors viewing the economic softness as a factor that could influence the interest rate outlook.
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