Asia-Pacific markets surged on Tuesday, buoyed by Wall Street’s gains amid easing recession concerns in the United States. Investors are closely monitoring pivotal central bank meetings this week, with the Bank of Japan (BOJ) and the U.S. Federal Reserve both expected to hold interest rates steady.
Highlights of the Day
Hong Kong Tech Stocks Lead the Charge
Hong Kong’s Hang Seng Index climbed 2.29% in its last trading hour, driven by strong performances in major tech companies. Leading the rally was Baidu, which surged 12.11% thanks to the launch of two new artificial intelligence models. Other tech giants, including NIO Inc. (+8.03%) and Li Auto (+5.99%), also contributed to the Hang Seng Tech Index’s 3.28% rise.
Since the start of the year, the Hang Seng Index has increased by 22.88%, with tech stocks continuing to outperform. Analysts attribute this growth to favorable developments in the Chinese tech sector and broader optimism about the global economy.
Mainland China and Japanese Markets
Mainland China’s CSI 300 Index rose 0.27%, closing at 4,007.72. Meanwhile, Japan’s Nikkei 225 gained 1.20%, ending at 37,845.42, and the broader Topix Index added 1.29% to close at 2,783.56. Japanese markets are in the spotlight as the BOJ begins its two-day monetary policy meeting. Analysts widely expect the central bank to maintain its benchmark interest rate at 0.5%.
Mixed Performances in South Korea and Australia
South Korea’s Kospi Index closed flat at 2,612.34, while the Kosdaq rose slightly by 0.27% to 745.54. In Australia, the S&P/ASX 200 Index also remained flat at 7,860.40, paring earlier gains. The Reserve Bank of Australia’s cautious stance on further rate cuts has created some uncertainty in the Australian market.
Indian Stocks Shine
India’s Nifty 50 was up 1.20%, and the BSE Sensex rose 1.07% as of midday trading. Analysts point to structural growth opportunities in Indian equities as a key driver of the rally.
Spotlight on U.S. Markets and Central Banks
The U.S. Federal Reserve is also holding a key meeting this week, with expectations that it will keep interest rates unchanged. The Fed’s decision comes as the U.S. economy shows mixed signals, including a rebound in retail sales and a decline in consumer confidence in recent weeks.
On Monday, the S&P 500 climbed 0.64% to close at 5,675.12, while the Nasdaq Composite gained 0.31% to end at 17,808.66. The Dow Jones Industrial Average rose 0.85%, closing at 41,841.63. Gains were led by companies like Walmart and International Business Machines (IBM).
Gold Hits Record High
Amidst the uncertainty surrounding global interest rates, spot gold hit a fresh high of $3,013.35 per ounce, appreciating by 0.39% on Tuesday morning Singapore time. Analysts expect further gains in gold prices if the Federal Reserve signals a potential rate cut in June.
Analyst Commentary: A Shift Towards Non-U.S. Markets
Swiss investment bank Julius Baer has downgraded its positive outlook on U.S. equities, citing opportunities in non-U.S. markets. Mathieu Racheter, head of equity strategy research, emphasized the rotation into European and Asian equities, particularly highlighting Chinese and Indian stocks as promising areas for growth.
“Chinese equities are in a cyclical bull market, while Indian names offer long-term structural growth,” Racheter noted. He also suggested that Swiss equities and German mid-caps provide defensive quality and reasonable valuations.
Nio and BYD Lead EV Stocks
Shares of Chinese electric vehicle (EV) manufacturers saw significant gains. Nio surged 17.24% after announcing a partnership with battery manufacturer CATL to develop a battery-swapping network. Similarly, BYD rose 8.85% following the announcement of new fast-charging technology for its EVs.
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