Asian stocks were in the green on Tuesday, following in the wake of a tech-inspired Wall Street rally which saw Japan’s Nikkei reach a 33-year high.
Investor mood was also lifted by some positive data out of China and hopes that the Fed might offer some clearer signals on where it’s going to be heading on interest rates over the next couple of months.
Tokyo’s benchmark share average reached a level not seen since March 1990, as investors snapped up chip-related stocks.
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The Nikkei share average rose 1.16%, or 385.76 points, to close at 33,763.18, while the broader Topix was ahead 0.82%, or 19.55 points, to 2,413.09.
Chip-connected shares led the gains after tracking upbeat performances by US chipmakers Nvidia and Advanced Micro Devices in New York. Shares of Tokyo Electron gained 3.28%, while Advantest jumped 6.05%, lifting the Nikkei by around 154 points.
The Nikkei clocked its best year in a decade in 2023, underpinned by expectations of better governance. After initially pulling back at the start of 2024, the benchmark index has recovered to hit its highest since Japan’s “bubble economy” of the late 1980s and early 1990s.
Mainland China stocks rebounded slightly, after a five-day losing streak, with tourism companies leading the gains amid rising enthusiasm for winter travel, and as some investors bought the dip after blue-chip shares hit a nearly five-year low in the previous session.
The blue-chip CSI 300 Index edged up 0.20% and the Shanghai Composite Index rose 0.20%, or 5.71 points, to 2,893.25. The Shenzhen Composite Index on China’s second exchange gained 0.27%, or 24.00 points, to 8,971.72.
But that Wall Street tech rally failed to have an impact on Hong Kong as it continued a six-day slide, its longest since early September.
Its tech giants slipped 0.2%, with food-delivery giant Meituan down 3.3%, and the Hang Seng Index fell 0.21%, or 34.43 points, to 16,190.02.
Fede Cut Bets Strengthen
Elsewhere across the region, in earlier trade, Sydney jumped more than 1%, while Mumbai, Singapore, Manila and Wellington were also on the rise. Seoul edged back. MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2%.
Trading in Europe was also set for a positive turn, with the pan-region Euro Stoxx 50 futures up 0.29%, German DAX futures 0.27% higher and FTSE futures up 0.34%. US stock futures, the S&P 500 e-minis, were down slightly 0.1%.
The positive sentiment across the region’s equities markets comes ahead of December’s US Consumer Price Index (CPI) reading due to be published on Thursday. It is expected to show headline inflation rose 0.2% in the month and by 3.2% on an annual basis.
Overnight, the New York Fed’s latest Survey of Consumer Expectations showed that US consumers’ projection of inflation over the short run fell to the lowest level in nearly three years in December.
That reinforced bets for Fed cuts to begin soon, though some analysts say the market pricing of monetary easing is overdone.
China is due to publish December CPI figures on Friday which analysts expect will show further deflation amid persistent weakness in the economy.
China’s stock market was among the worst performers globally in 2023, with the CSI300 index closing the year with 11% losses, against a 20% gain for global stocks.
Us Dollar Slips Against Yen
The dollar on Tuesday dropped 0.43% against the yen to 143.6. It is still some distance from last week’s high of 145.98. The yen was earlier little changed after Tokyo core inflation data slowed for the second month in December, new data showed on Tuesday.
The result is expected to take some pressure that might encourage the Bank of Japan to quickly exit ultra-loose monetary policy.
The European single currency was up 0.1% on the day at $1.0954, having lost 0.74% in a month, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was down at 102.19.
In Asian trading, the yield on benchmark 10-year Treasury notes rose to 4.0114% compared with its US close of 4.002% on Monday.
The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 4.3704% compared with a US close of 4.345%.
US crude ticked up 0.1% to $70.84 a barrel. Brent crude rose to $76.32 per barrel.
Key figures
Tokyo – Nikkei 225 > UP 1.16% at 33,763.18 (close)
Hong Kong – Hang Seng Index < DOWN 0.21% at 16,190.02 (close)
Shanghai – Composite > UP 0.20% at 2,893.25 (close)
London – FTSE 100 > UP 0.07% at 7,699.19 (0954 GMT)
New York – Dow > UP 0.58% at 37,683.01 (Monday close)
- Reuters with additional editing by Sean O’Meara
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