Asian Stocks Mostly Rise on Tech Rebound, China Lags Despite Rate Cut

Asian stock markets saw a mixed performance on Tuesday, with most indices rising as technology stocks rebounded from recent losses. However, Chinese markets remained under pressure due to ongoing concerns about the country’s economic outlook and the potential for renewed trade tensions with the U.S. under a possible Donald Trump presidency.

Key Takeaways:

• Tech Stocks Rebound: Technology-heavy indexes across Asia experienced a relief rally, tracking gains in their U.S. counterparts driven by renewed enthusiasm for artificial intelligence. This rebound benefited companies like Taiwan’s TSMC, which had recently suffered despite reporting strong second-quarter earnings.
• Nikkei and TOPIX Edge Higher: Japan’s Nikkei 225 and TOPIX indexes saw modest gains, with the Nikkei briefly touching a record high. This positive performance was fueled by strength in technology stocks and a weakening yen, which favored export-oriented companies.
• Other Asian Markets Rise: South Korea’s KOSPI index also edged higher, supported by slightly positive producer price index (PPI) inflation data for June. Australia’s ASX 200 index jumped 0.7%, driven by gains in bank and mining stocks.
• Chinese Stocks Lag: China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell, while Hong Kong’s Hang Seng index also experienced losses. The unexpected interest rate cut by the People’s Bank of China on Monday failed to significantly boost sentiment, as analysts deemed the cut too small to have a substantial impact. Concerns over China’s economic outlook, coupled with fears of a potential trade war with the U.S. under a Trump presidency, continued to weigh on Chinese markets.
• India Awaits Budget Announcement: Futures for India’s Nifty 50 index indicated a mildly positive open, with the index and the BSE Sensex 30 hovering near record highs, supported by a weak rupee and optimism about the Indian economy. Investors are awaiting the Indian government’s budget announcement for 2024, which could introduce some volatility into the market.

Overall:

Asian markets showed a mixed performance, with technology stocks leading a rebound in most indices while Chinese stocks remained under pressure due to economic and geopolitical concerns. The upcoming U.S. earnings reports from Alphabet and Tesla, along with the potential impact of India’s budget announcement, are expected to be key drivers of market sentiment in the coming days.