Markets

Nikkei Flatlines After Record Push, AI Optimism Lifts Hang Seng

 

Asia’s major stock indexes advanced on Tuesday, finding gains despite warmer-than-expected Japanese inflation and a persistently gloomy global outlook.

The AI frenzy continued to keep spirits high in some corners, lifting tech stocks, though the wait for more significant stimulus measures from Beijing for its stumbling economy weighed too. 

Japan’s Nikkei share average closed nearly flat, giving up most of its early gains as investors sold shares of chip heavyweight Advantest to lock in profits.

 

Also on AF: Lockbit Cybercrime Gang Claims It’s Up And Running Again

 

The Nikkei share average edged up 0.02%, or 5.81 points, to close at 39,239.52, rising as much as 0.5% to a record 39,426.29 earlier in the session. The bank sector rose 1.69%, lifting the broader Topix 0.18% to end at 2,678.46.

Steel makers jumped 3.16% to become the top performer among the Tokyo Stock Exchange’s 33 industry sub-indexes. Kobe Steel and Nippon Steel rose 4.36% and 4.16%%, respectively.

China stocks were ahead too, with artificial intelligence (AI) firms leading the gains, helped by the AI boom in the United States. 

China’s blue-chip CSI 300 Index gained 1.20%, while the Shanghai Composite Index climbed 1.29%, or 38.46 points, to 3,015.48. The Shenzhen Composite Index on China’s second exchange advanced 2.35%, or 39.43 points, to 1,716.58.

China’s blue-chip CSI 300 has rebounded 11.5% from a recent low early this month on Beijing’s attempts to spur economic growth and boost market confidence.

Market participants are now awaiting authorities’ next policy move as China’s rubber stamp parliament – the National People’s Congress – begins its annual meeting on March 5.

In Hong Kong, tech giants jumped 1% but mainland property developers lost 2%. The benchmark Hang Seng Index gained 0.94%, or 156.06 points, to end at 16,790.80, while the Hang Seng China Enterprises Index was up 1.46%.

Elsewhere across the region, in earlier trade, Mumbai and Sydney were also up. Seoul, Taipei, Singapore, Jakarta, Bangkok, Manila and Wellington were all down. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2%, keeping below last week’s seven-month peak.

 

Treasuries Auctions

The Federal Reserve’s favoured measure of inflation, the core personal consumption expenditures (PCE) price index, is due on Thursday and forecasts are for a rise of 0.4%.

And rate jitters and enormous auctions – $127 billion on Tuesday and another $42 billion on Wednesday – left Treasuries under pressure, though yields steadied in the Asia day.

Ten-year US Treasury yields were last 1.4 basis points lower at 4.29%. Two-year yields fell 3 bps to 4.71%.

Markets have already pushed out the likely timing of a first Federal Reserve easing from May to June, which is currently priced at around a 70% probability. Futures imply a little more than three quarter-point cuts this year, compared to five at the start of the month.

Figures on inflation in the European Union are also due on Friday, with the core gauge again seen slowing to the lowest since early 2022 at 2.9% and bringing nearer the day when the European Central Bank (ECB) might ease policy.

The yen steadied at 150.50 to the dollar and inched off a three-month low on the euro as Japanese inflation stayed at the central bank’s 2% year-on-year target, keeping alive expectations it would exit negative rates by April.

Brent crude futures hovered around $82.63 a barrel after it was reported Hamas had received a draft Gaza truce proposal including a 40-day pause in fighting.

 

Key figures

Tokyo – Nikkei 225 > UP 0.02% at 39,239.52 (close)

Hong Kong – Hang Seng Index > UP 0.94% at 16,790.80 (close)

Shanghai – Composite > UP 1.29% at 3,015.48 (close)

London – FTSE 100 > UP 0.08% at 7,690.52 (0933 GMT)

New York – Dow < DOWN 0.16% at 39,069.23 (Monday close)

 

  • Reuters with additional editing by Sean O’Meara

 

Read more:

Chinese Firms Withdraw IPOs at Record Rate Amid Regulatory Ire

Restructuring Firms Busy in Hong Kong Amid China Property Crisis

Nikkei’s Record Run Continues, Hang Seng Dips on China Doubts

Nvidia Worth $2 Trillion as AI Fever Grips US, Asia Markets

 

 

Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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