Asian stocks gain to shrug off US tech concerns: Markets wrap

(Bloomberg) — Asian stocks rose on Tuesday, defying a mixed day on Wall Street as speculation mounted that the technology sector’s rally may be running out of steam.

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Stocks in Japan outperformed the region, rising as much as 1.7%. US stock futures rose in Asian trading after various US non-technology sectors rose on Monday. Meanwhile, Nvidia, the chipmaker at the heart of the AI ​​revolution, extended its three-day losses by nearly $430 billion – crossing the technical threshold for a correction.

In Asia, investors were seen exiting the technology sector and into other parts of the market. They have seized value stocks in Japan, such as financial stocks, amid growing expectations that the country’s central bank will tighten policy.

Among currencies, the yen has strengthened, but it is still hovering near its weakest level in about 34 years. The chief currency official had warned that the authorities were ready to intervene if necessary, while some traders saw the possibility of the yen falling to 170 yen to the dollar. The US dollar fell against most of its G10 peers as Treasuries stabilized in Asian trading.

“As we approach the end of the quarter, global investors are rebalancing their portfolios, selling assets that have performed well recently and buying names that have lagged,” said Hideyuki Ishiguro, chief strategist at Nomura Asset Management. This is likely to help support the broader market. Topix indicator said.

Chinese machinery stocks rose after President Xi Jinping urged scientists and researchers to boost technological innovation with a greater sense of urgency, noting the dominance of some key technologies by other countries. Speaking at the World Economic Forum, Premier Li Qiang warned of negative consequences if countries decouple economically, while responding to criticism that his country’s industrial policy led to excess capacity.

In other news, the US is investigating China Mobile, China Telecom and China Unicom over concerns that the companies could exploit access to US data through their US cloud and internet businesses by providing it to Beijing, Reuters reported, citing three unidentified people familiar with the matter. The command. .

After the tech-led rally, Deutsche Bank’s Pinky Chadha said US stocks are set to pause. RBC Capital Markets’ Lori Calvasina noted that there is a lot of good news in the markets, and if this optimism proves unwarranted, there could be downside risks. For Oppenheimer’s John Stoltzfus, while the bull market appears sustainable, some profit-taking is expected.

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“A pullback in the technology sector is certainly possible, even if the sector will do well during the summer months overall,” noted Matt Maley of Miller Tabak. “Even if you agree with the most optimistic scenario of the AI ​​phenomenon in the second half of 2024, no group will move in a straight line.”

In commodities, oil maintained its gains as investors assessed the potential repercussions resulting from escalating geopolitical tensions. Gold fell after closing higher in the previous session due to the weakness of the US dollar, which strengthened the attractiveness of the commodity. Copper rose as investors weighed the prospects of potential stimulus in China after weak fiscal revenue data.

Bitcoin rebounded after falling on Monday. Losses are piling up in the cryptocurrency market after its second-worst weekly decline in 2024, a reflection of slowing demand for Bitcoin exchange-traded funds and uncertainty over monetary policy.

Main events this week:

• Consumer confidence index issued by the US Conference Board, Tuesday

• The Fed’s Lisa Cook and Michelle Bowman speak Tuesday

• New home sales in the United States, Wednesday

• Industrial profits in China, Thursday

• Eurozone economic confidence, consumer confidence, Thursday

• US Durable Goods, Initial Jobless Claims, GDP, Thursday

• Nike reports earnings on Thursday

• Japan, Tokyo CPI, unemployment, industrial production, Friday

• US PCE Inflation, Spending and Income, University of Michigan Consumer Confidence, Friday

• The Fed’s Thomas Barkin speaks on Friday

Some key movements in the markets:

Stores

• S&P 500 futures rose 0.1% as of 1:07 p.m. Tokyo time

• Nasdaq 100 futures rose 0.2%

• Japan’s Topix index rose 1.3%.

• Australia’s S&P/ASX 200 index rose 1%.

• The Hang Seng Index in Hong Kong rose 0.5%.

• The Shanghai Composite Index fell by 0.4%.

• Euro Stoxx 50 futures fell 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• There was little change in the euro at $1.0737

• There was little change in the Japanese yen at 159.47 to the dollar

• There was little change in the yuan in external transactions at 7.2799 to the dollar

Digital currencies

• Bitcoin rose 3.1% to $61,344.34

• Ethereum rose 2.1% to $3,377.48

Bonds

• The yield on 10-year Treasury bonds was little changed at 4.23%.

• The 10-year Japanese bond yield was little changed at 0.990%.

• The Australian 10-year bond yield fell two basis points to 4.20%.

Goods

• There was little change in West Texas Intermediate crude

• Gold in spot transactions fell 0.5 percent to $2,323.66 per ounce

This story was produced with assistance from Bloomberg Automation.

–With assistance from Toshiro Hasegawa.

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