Asia’s major stock indexes made steady progress on Monday ahead of a busy week of central bank events and data releases, with Japan’s Nikkei the standout again as it reached a new historic high.
Tokyo’s main benchmark breached 40,000 points for the first time to end at a record peak, as corporate governance reform and solid valuations continue to pave the way for long-term global investor interest.
As technology shares jumped, tracking their US counterparts, the Nikkei share average finished the day up 0.5% at 40,109.23. The broader Topix was down 0.12%, or 3.14 points, to 2,706.28.
After five consecutive weeks of gains, the index smashed through the fresh intraday peak of 39,990.23 hit on Friday and rose as high as 40,314.64 before momentum eased in the afternoon session.
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Overseas investors have been leading the buying, and many seem to be investing from a medium- to long-term perspective.
While foreign interest has helped to fuel the Nikkei’s rapid rise, some see the continued rally as a gradual turning point for domestic retail investors, who have largely given Japan’s stocks the cold shoulder.
On Monday, Japanese tech shares got a kick from the ongoing artificial intelligence rally in US stocks that saw the S&P 500 and Nasdaq record highs on Friday.
Chip-testing equipment maker Advantest, which counts US artificial intelligence firm Nvidia among its customers, was up 3.7%. Chip-making equipment giant Tokyo Electron gained 2.4%. The shares in those two companies added a combined 160 index points to the Nikkei’s 198-point rise.
China and Hong Kong stocks edged up, though traders were cautious as they await policy signals from China parliament’s annual meeting this week.
China’s parliament is expected to unveil moderate stimulus plans to stabilise growth at its annual meeting beginning on Tuesday, but may disappoint those calling for a detailed roadmap of bold policies to fix the country’s deep structural imbalances.
China’s blue-chip CSI300 Index gained 0.09%, while the Shanghai Composite Index rose 0.41%, or 12.28 points, to 3,039.31. The Shenzhen Composite Index on China’s second exchange gained 0.18%, or 3.12 points, to 1,728.52.
Shares in energy and healthcare both jumped 1.8%, while communications equipment surged 2.8%.
Eyes on Fed Chair Powell
In Hong Kong, tech giants slipped 0.4% and mainland property developers dropped 2.6%. The benchmark Hang Seng edged ahead 0.04%, or 6.53 points, to 16,595.97, but the Hang Seng China Enterprises Index lost 0.28%.
Elsewhere across the region, in earlier trade, Seoul, Mumbai, Manila and Kuala Lumpur were up, while Sydney, Wellington, Jakarta and Singapore were down.
MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.4%, after snapping a five-week winning streak with a slight drop last week.
All eyes will be on Federal Reserve Chair Jerome Powell when he testifies before lawmakers on Wednesday and Thursday, though analysts assume he will stay in wait-and-see mode on policy given recent upside surprises on inflation.
The February payrolls report on Friday could also shift the calculus with forecasts favouring a still-solid rise of 200,000 after January’s barnstorming 353,000 jump.
The European Central Bank meets Thursday and is considered certain to keep rates at 4.0%, but also lower its outlook for inflation in a nod to eventual cuts.
Data Weighs on US Dollar
Other events of note include President Joe Biden’s State of the Union address on Thursday and the Super Tuesday US primaries.
Eurostoxx 50 futures added 0.2%, while FTSE futures dipped 0.1%. S&P 500 futures and Nasdaq futures were trading near flat, having made record closing highs on Friday on upbeat earnings and enthusiasm for all things AI.
In currency markets, the dollar had been weighed by some soft US economic data, while the Japanese yen firmed ahead of Tokyo consumer price data on Tuesday that is expected to show inflation sprang higher in February.
The dollar stood at 150.11 yen, having peaked at 150.85 last week, while the euro steadied at $1.0842 after bouncing from a low of $1.0796 last week.
The US data surprise had helped gold to a two-month top and the metal was last trading steady at $2,082 an ounce.
Oil prices firmed after OPEC+ members led by Saudi Arabia and Russia agreed on Sunday to extend voluntary oil output cuts of 2.2 million barrels per day into the second quarter.
Brent rose 13 cents to $83.68 a barrel, while US crude gained 2 cents to $79.99 per barrel.
Key figures
Tokyo – Nikkei 225 > UP 0.50% at 40,109.23 (close)
Hong Kong – Hang Seng Index > UP 0.04% at 16,595.97 (close)
Shanghai – Composite > UP 0.41% at 3,039.31 (close)
London – FTSE 100 < DOWN 0.22% at 7,665.88 (0937 GMT)
New York – Dow > UP 0.23% at 39,087.38 (Friday close)
- Reuters with additional editing by Sean O’Meara
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