Asia report: Markets rise after Wall Street tech rally

19th Nov 2024 10:20

(Sharecast News) - Asia-Pacific markets posted gains on Tuesday as investors evaluated comments from Chinese policymakers at an investment summit in Hong Kong.

Positive sentiment was also supported by an overnight rally on Wall Street led by Tesla.

"As traders awaited President-elect Donald Trump's cabinet choices and evaluated the outlook for Federal Reserve easing, Asian equities increased on Tuesday, while US bond rates and the currency stayed below recent multi-month highs," said TickMill's Patrick Munnelly.

"Traders are leveraging the recent market weakness to purchase equities at discounted prices, despite concerns regarding the outlook for interest rates.

"Markets were also supported by substantial gains in mining and energy stocks, which were led by the increasing prices of commodities."

Munnelly noted that although the potential for significant moves were "somewhat constrained" by Nvidia's impending earnings report on Wednesday, tech shares rose in tandem with Wall Street's comeback from last week's sharp losses.

"According to CME FedWatch, market bets on a quarter-point interest rate cut at the Fed's next meeting in December have dropped to less than 59% from 62% the day before and more than 65% a week ago.

"Markets view Trump's projected fiscal expenditures, higher tariffs, and tougher immigration as inflationary, which might impede Fed rate cuts at a time when a string of strong economic data is already preventing them.

"Trump has started to nominate people; last week, he filled jobs in the defence and health sectors, but the Treasury secretary and trade representative, two crucial positions for the financial markets, have not yet been revealed."

Markets rise across the region after mixed session on Wall Street

In Japan, the Nikkei 225 and Topix indices rose 0.51% and 0.68%, respectively, with the Nikkei closing at 38,414.43.

Gains were driven by industrial stocks such as Japan Steel Works, which soared 11.55%, Fujikura, up 7.17%, and Ebara Corporation, which added 5.21%.

China's Shanghai Composite gained 0.67% to 3,346.01, while the Shenzhen Component jumped 1.9% to 10,743.84.

Automotive and technology companies led the charge, with Shenyang Jinbei Automotive, Shandong Daye Co, and Ningbo Techmation all hitting the 10% daily limit.

At the Hong Kong summit, Chinese vice premier He Lifeng pledged further support for Hong Kong's innovation and financial reform, emphasising Beijing's commitment to solidifying the city's position as an international financial hub.

Hong Kong's Hang Seng Index rose 0.44% to 19,663.67, buoyed by strong performances from BYD Electronic International, up 6.33%, Trip.com Group, which climbed 5.81%, and Zijin Mining Group, up 4.7%.

South Korea's Kospi 100 edged up 0.05% to 2,477.34, with SK Innovation surging 10.3%, Kogas up 9.26%, and S-Oil Corporation rising 5.84%.

Australia's S&P/ASX 200 advanced 0.89% to 8,374.00.

Technology One led with a 10.05% gain, while Sonic Healthcare and Block Inc rose 6.83% and 6.25%, respectively.

Meanwhile, New Zealand's S&P/NZX 50 rose 0.4% to 12,816.32, supported by Pacific Edge, which gained 8.33%, Scales Corporation, up 2.98%, and Ryman Healthcare, which added 2.73%.

In currency markets, the dollar was last down 0.64% on the yen to trade at JPY 153.67, while it gained 0.28% against the Aussie to AUD 1.5409, and advanced 0.23% on the Kiwi, changing hands at NZD 1.7008.

Oil prices dipped, with Brent crude futures last down 0.33% on ICE at $73.06 per barrel, and the NYMEX quote for West Texas Intermediate falling 0.49% to $68.82.

Chinese officials pledge support for Hong Kong, RBA releases cautious minutes

In economic news, China's vice premier He Lifeng pledged to enhance Hong Kong's economic competitiveness through increased innovation and stronger financial policies on Tuesday.

Speaking at the Global Financial Leaders Investment Summit in Hong Kong, He emphasised Beijing's commitment to advancing the city's position as a leading international financial centre.

According to translations, He highlighted that recent stimulus measures from Beijing had already positively impacted Hong Kong, adding that the economy's growth trajectory now appeared more assured.

In Australia, the Reserve Bank's latest meeting minutes revealed a cautious stance on interest rates.

While policymakers saw no immediate need for changes, they stressed the importance of remaining adaptable as economic conditions evolve.

The central bank's board noted that if consumption continued to underperform significantly, leading to lower inflation, a reduction in the cash rate target could be necessary.

Conversely, if consumer spending rebounded more sharply than anticipated, current monetary policy settings might need to remain in place longer than initially projected.

Reporting by Josh White for Sharecast.com.