Asian stocks gained for the third straight day, with Japanese shares leading the charge and fresh investments flowing into Chinese tech companies. Hong Kong’s equity benchmarks outperformed, climbing around 2%, with shares of BYD Co. hitting a record high after the company introduced a new electric car charging system. Japanese stocks rose more than 1%, following a second consecutive day of gains for US stocks, which saw industrial and energy shares rally.
Chinese Tech Earnings Set to Boost Stock Rally
The rally in Chinese stocks may receive a new boost from upcoming tech earnings reports, with companies like Xiaomi Corp. and Tencent Holdings Ltd. set to release their figures this week. While Beijing’s recent briefing on boosting consumption was seen as underwhelming by some, the positive market response on Tuesday suggests that investors remain optimistic about the outlook. BYD’s technological advancements also contribute to the growing narrative of China’s global competitiveness in tech.
US Slowdown vs. China’s Growth Focus
Despite signs of a slowdown in the US, investors are looking to China’s efforts to stimulate growth. Richard Harris, founder and CEO of Port Shelter Investment Management, told Bloomberg TV, “The direction of travel in China is very much looking to stimulate growth,” adding that we are witnessing a shift from the US to China in terms of investment focus.
US Treasury Yields and Dollar Move Little
The yield on 10-year US Treasuries remained largely unchanged, slipping by just one basis point to 4.30%. The Bloomberg Dollar Spot Index edged slightly higher, while US equity futures dipped in early Asian trading.
Japan’s Trading Houses and Bank of Japan Meeting
In Japan, shares of major trading houses surged after Berkshire Hathaway Inc. increased its stake in the companies. Financial stocks also gained, supported by higher yields, ahead of the Bank of Japan’s policy meeting on Wednesday. Economists expect the central bank to keep its policy rate at 0.5%, but analysts are closely watching for comments from BOJ Governor Kazuo Ueda regarding the recent rise in yields.
China-US Tensions and Trade Policy Updates
Meanwhile, President Donald Trump confirmed that Chinese leader Xi Jinping would visit Washington soon, amid ongoing trade tensions between the world’s two largest economies.
US Retail Sales and Market Outlook
On the US economic front, retail sales in February rose less than expected, with the previous month’s data revised lower. However, the control-group sales, which contribute to GDP calculations, increased by 1%, reversing the previous decline.
Jun Rong Yeap, a market strategist at IG Asia, noted, “While recession concerns may seem overblown for now, the US economy remains on a slowing trajectory, keeping valuations under close scrutiny.” Investors will be keenly focused on the Federal Reserve’s meeting on Wednesday, with expectations for a steady interest rate policy and attention on Chairman Jerome Powell’s press conference for insights into the future economic path.
Oil, Gold, and Geopolitical Risks
Oil prices steadied after a two-day gain, with attention on China’s economic outlook and geopolitical risks in the Middle East. Gold remained near $3,000 per ounce, as investors continue to monitor global market conditions.
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