SHANGHAI, China – Chinese shares saw a surge, diverging from the broader weakness in Asia following a tech-led decline on Wall Street. The rally came after policymakers implemented measures to revive investor confidence, with the CSI 300 Index of mainland shares rising 1.8% and a gauge of Hong Kong-listed Chinese firms jumping as much as 3.8%. Property stocks saw significant gains in response to increased funding help from banks for the troubled sector, and a crackdown on trading by quant funds reduced concerns about short selling.
In contrast, Japan, South Korea, and Australia experienced losses in their markets after the Nasdaq 100 fell nearly 1% and the S&P 500 slid below 5,000 on Tuesday. The spotlight is now on chipmaker Nvidia Corp.’s earnings and the Federal Reserve’s latest policy meeting minutes due on Wednesday, which has led to a slip in contracts for US equities. According to Marvin Chen, a Bloomberg Intelligence analyst, “AI hype has deflated a bit and there may be some rotation within north Asia to China, which is still seeing post-holiday cheer from relatively better consumer spending data, while market stabilization measures are still ongoing.”
HSBC Holdings Plc’s fourth-quarter profit reported an 80% decrease after taking charges on holdings in a Chinese bank and from selling its French retail operations, and there was speculation about a fresh wave of US sanctions targeting aluminum from Russia. The dollar and 10-year Treasury yields remained stable in Asian trading, while a bearish outlook for China’s steel demand pushed iron ore to a three-month low.
In Japan, the Nikkei 225 continued to pull away from reaching its highest-ever close in 1989, but macro and stock hedge funds are betting on Japan this year, predicting a policy shift from the central bank after eight years of negative interest rates. The yen steadied around 150 per dollar as the nation’s exports rose more than expected in January. The ongoing earnings season in the US has reaffirmed the resilience of Corporate America, with highlights including Walmart Inc.’s strong earnings and Palo Alto Networks Inc.’s late trading tumble after cutting its revenue forecast for the year.
Ahead of Nvidia’s earnings report, there were concerns among traders about a potential alternative to the networking card supplied by the chipmaker being developed by Microsoft Corp. The artificial-intelligence frenzy has boosted stocks linked to the technology, and Nvidia is one of the few firms to have demonstrated significant revenue growth from AI. Additionally, traders are awaiting the Fed’s January meeting minutes, offering clues about policymakers’ stance on a rate-cut timeline after concerns of faster-than-expected inflation last week.
Overall, stocks were mixed in various markets, with the S&P 500 futures falling, Japan’s Topix slipping, and Hong Kong’s Hang Seng rising. Currencies and commodities also saw fluctuations, with the Bloomberg Dollar Spot Index remaining stable, while Bitcoin and Ether experienced minor changes.
Those interested in market trends are also looking forward to key events this week including Eurozone consumer confidence, Nvidia earnings, and the Federal Reserve releasing minutes from its January meeting.