Japanese stocks grabbed the headlines on Tuesday hitting a 33-year high off the back of strong earnings forecasts as Asia stocks mostly held their ground despite weaker-than-expected data out of China.
Hopes of a softening dollar also offered some encouragement, although investors were wary of crucial US government debt-ceiling negotiations, with a little more than two weeks to go before the government could run short of money to pay its bills.
But Japan shrugged off that caution, tracking chip stocks’ overnight US gains with the country’s Topix index closing up 0.58% at 2,127.18, its highest finish since August 1990.
Also on AF: North Korea Hackers Stole Crypto Worth $721 Million From Japan
The benchmark Nikkei share average extended its gains too, jumping 0.73% to 29,842,99, its highest close since November 2021.
“Investors, both at home and abroad, have taken a fresh look at Japanese stocks as overall their outlook was strong,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.
“In addition, the fundamentals of the Japanese economy is strong. Japanese politics is also stable and the Bank of Japan (BOJ) is keeping the ultra-low policy.”
Heavyweight chip-related shares tracked a surge in US semiconductor shares, which boosted the Nasdaq. Tokyo Electron rose 4.23% and chip-testing equipment manufacturer Advantest jumped 5.52%.
China stocks dipped slightly, though, after April activity data broadly missed expectations and pointed to a slow economic recovery. Hong Kong stocks were up, led by tech shares.
China’s Slow Revival
China’s April industrial output and retail sales growth undershot forecasts, suggesting the economy lost further momentum at the start of the second quarter and adding to the raft of recent data highlighting a wobbly post-Covid recovery.
“The latest China data release adds some more tiles to the mosaic picture of a slow and underwhelming recovery taking place in China,” said analysts at Citi.
The Shanghai Composite Index dipped 0.60%, or 19.75 points, to 3,290.99, while the Shenzhen Composite Index on China’s second exchange fell 0.71%, or 14.42 points, to 2,019.38.
In Hong Kong, tech giants climbed 1.3%, leading the gains, after filings showed that a few hedge funds added positions for overseas-listed Chinese companies in the first quarter of the year. JD.com jumped 4.2%, and Alibaba added 0.9%.
The Hang Seng Index gained 0.04%, or 7.12 points, to 19,978.25, while the China Enterprises Index gained 0.14%.
Sluggish New York data
Elsewhere across the region, in early trade, there were also losses in Sydney, Singapore, Mumbai, Jakarta and Bangkok, though Seoul, Taipei and Manila edged up.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.32% higher.
Sluggish manufacturing data from New York State on Monday raised concerns about a slowing US economy that could help bring down inflation, helping the case for the Federal Reserve to pause on rate hikes.
Benchmark 10-year notes fell 2.1 basis points to 3.4831% on Tuesday while the dollar index fell 0.029%, with the Japanese yen strengthening 0.10% versus the US currency at 135.98 per dollar.
US crude rose 0.41% to $71.40 per barrel and Brent was at $75.57, up 0.45% on the day. Spot gold dropped 0.21% to $2,016.48 an ounce.
Key figures
Tokyo – Nikkei 225 > UP 0.73% at 29,842.99 (close)
Hong Kong – Hang Seng Index > UP 0.04% at 19,978.25 (close)
Shanghai – Composite < DOWN 0.60% at 3,290.99 (close)
London – FTSE 100 > UP 0.23% at 7,795.56 (0934 GMT)
New York – Dow > UP 0.14% at 33,348.60 (Monday close)
- Reuters with additional editing by Sean O’Meara
Read more:
China’s Reports Weak April Data, Record Youth Unemployment
Eyeing Top Dollar, China Consulting Firms Tested Beijing’s Limits
India Regulator Warns Against Hasty End to Adani Group Probe
