Asian equities extended their gains for a third consecutive session, driven by a surge in Japanese stocks and renewed investor confidence in Chinese technology firms.
Hong Kong’s stock benchmarks led the region, climbing around 2%, fueled by a record-setting rally in BYD Co. after the company unveiled an innovative electric vehicle charging system. Japanese indexes also advanced more than 1%, following Wall Street’s second consecutive day of gains, with industrial and energy stocks propelling the U.S. market higher.
China’s Tech Earnings Provide Fresh Momentum
China’s stock market, which has been leading global rallies this year, is poised for further gains as major tech firms prepare to report earnings. Xiaomi Corp. and Tencent Holdings Ltd. are set to announce results this week, potentially serving as key catalysts for continued momentum.
Despite mixed reactions to Beijing’s latest policy briefing on boosting consumption, market sentiment remains optimistic. The strength of companies like BYD in technological innovation reinforces China’s global competitiveness in the sector.
“The U.S. is showing signs of economic slowdown, while China is actively working to stimulate growth,” said Richard Harris, CEO of Port Shelter Investment Management, in an interview with Bloomberg TV. “We’re witnessing a significant shift from the U.S. to China in terms of market leadership.”
Japan’s Rally and Central Bank Watch
Japanese stocks benefited from Berkshire Hathaway Inc.’s increased stake in the country’s top trading houses, driving those shares higher. Financial stocks also gained amid rising bond yields ahead of the Bank of Japan’s policy decision on Wednesday.
The BOJ is widely expected to keep its policy rate at 0.5%, though investors are keenly awaiting Governor Kazuo Ueda’s commentary on the implications of rising yields. “The BOJ is likely monitoring the rapid increase in yields closely, and Ueda’s comments will be key for market direction,” noted Junki Iwahashi, senior economist at Sumitomo Mitsui Trust Bank.
Global Market Trends and U.S. Economic Signals
U.S. equity futures slipped slightly in Asian trading, while the yield on 10-year Treasuries remained stable at 4.30% after a minor decline on Monday. The Bloomberg Dollar Spot Index edged higher.
On Wall Street, the S&P 500 and Nasdaq 100 each gained approximately 0.6% on Monday, driven by small-cap stocks, despite declines in the Magnificent Seven tech giants.
Meanwhile, U.S. retail sales data for February fell short of expectations, with the prior month’s figures also revised downward. However, the control-group sales metric—which feeds into GDP calculations—rose 1%, reversing an earlier decline.
“While recession fears may be overstated for now, the U.S. economy is clearly slowing, keeping equity valuations under scrutiny,” said Jun Rong Yeap, market strategist at IG Asia.
Investors are also closely monitoring the Federal Reserve’s policy meeting this week. With rates expected to remain unchanged, markets will focus on updated economic projections and Fed Chair Jerome Powell’s comments for signals on future monetary policy.
Commodities and Geopolitical Developments
Oil prices steadied after two days of gains, as markets weighed China’s economic outlook alongside ongoing geopolitical risks in the Middle East. Meanwhile, gold held firm near the $3,000-an-ounce mark.
In geopolitical news, former U.S. President Donald Trump revealed that Chinese leader Xi Jinping is expected to visit Washington soon, amid ongoing trade tensions between the world’s two largest economies.
With strong earnings momentum and policy decisions on the horizon, investors remain focused on key developments shaping the global market landscape.
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