Asian Markets Advance on Ceasefire Prospects, Tech Boom in Hong Kong
Hong Kong
The Hang Seng Index surged 0.88% to 22,815 points on Tuesday, bolstered by a surge in tech stocks following a meeting between industry leaders and Chinese President Xi Jinping. The Shanghai Composite Index, however, fell 0.57% and the Shenzhen Composite lost 1.57%.
Hong Kong’s tech sector has been on a tear since artificial intelligence upstart DeepSeek’s unexpected success in January. E-commerce giant Alibaba has rallied 52% since the start of the year.
Tech stocks continued to shine after a symposium where Xi met with Alibaba co-founder Jack Ma, Huawei founder Ren Zhengfei, and BYD CEO Wang Chuanfu. Alibaba rose 2.8%, Tencent gained 1.7%, and BYD jumped 2.36%. Only Baidu underperformed, declining 0.11% ahead of its annual results announcement.
"President Xi acknowledged the challenges faced by private companies and pledged to do more to make life easier for them," said Michael Wan of MUFG. "This includes measures to improve access to government procurement, reduce financing costs, and decrease regulatory pressure."
Tokyo
The Nikkei 225 gained 0.25% to 39,270.40 points, while the broader Topix Index rose 0.31% to 2,775.51 points.
Seoul
The KOSPI Index climbed 0.63% at the close of trading.
Sydney
The S&P/ASX 200 Index retreated 0.66% as the Reserve Bank of Australia (RBA) cut interest rates for the first time in four years but remained cautious on the outlook.
Global Context
Asian markets largely followed the momentum of a strong performance in Europe, with the pan-European Euro Stoxx 50 Index hitting a record high led by defense stocks. In Tokyo, shares of military and aerospace engineering firm IHI soared 6.26%.
Impact of Ceasefire Talks
Market sentiment was lifted by the prospect of negotiations between Russia and Ukraine, with the US reportedly taking a positive stance towards discussions with Moscow. "If the hopes of a swift ceasefire grow, it will further improve investor morale," noted analysts at Tokai Tokyo Intelligence.
BoJ Policies and Inflation
The Japanese yen weakened 0.31% to 151.98 against the US dollar, driven by profit-taking after a recent surge. The yen has gained ground on expectations that the Bank of Japan may continue to raise interest rates, making it more attractive to investors.
Auto Industry and Oil Markets
Nissan’s stock price surged 3.65% after the Financial Times reported that rival Honda might be open to resuming merger talks with Nissan, which collapsed last week.
After days of pressure due to concerns about a return of ample Russian oil supply, oil prices attempted to recover. Speculation about a potential delay in production increases by OPEC countries provided some support. Additionally, Ukraine’s drone strike on an oil pipeline from the Caspian Sea to the Black Sea via southern Russia disrupted regional crude shipments.
