Asian stocks surged, driven by a rally in technology shares, amidst anticipation of significant events this week, including Federal Reserve Chair Jerome Powell’s congressional testimony and China’s National People’s Congress. Tech giants such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. led the charge, with notable gains seen in Japan’s Nikkei-225 Stock Average and South Korea’s Kospi index. Additionally, Chinese stocks experienced fluctuations ahead of the National People’s Congress, with healthcare stocks rallying in anticipation of policy support. The market also witnessed stability in oil prices and slight movements in bond yields and currency exchange rates.
Asian stocks surged today, propelled by a strong rally in technology shares, as investors braced for several key events scheduled for the week. Among the significant upcoming events are the congressional testimony by Federal Reserve Chair Jerome Powell and China’s National People’s Congress. Notably, tech equities outpaced the regional stock index, with leaders like Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. driving the gains.
In Japan, the blue-chip gauge Nikkei-225 Stock Average surpassed the 40,000 mark for the first time, signaling robust investor sentiment. Similarly, South Korea’s Kospi index surged by as much as 1.5%, reflecting the positive momentum fueled by the strong performance of US peers on Friday.
Charu Chanana, a strategist at Saxo Capital Markets in Singapore, remarked on the significance of the Nikkei 225 reaching 40,000, stating, “The Nikkei 225’s 40,000 is certainly a key psychological level, which could offer some resistance for the index and bring volatility.” However, Chanana emphasized that amidst structural factors favoring the market and yen weakness persisting, the milestone is more likely to signal bullish sentiment rather than concerns of overbought Japanese stocks.
Meanwhile, Chinese stocks exhibited fluctuations ahead of the 14th National People’s Congress, with investors eagerly anticipating potential stimulus measures to bolster the softening economy. Notably, healthcare stocks experienced significant gains in anticipation of supportive policies from the NPC.
Kinger Lau, a strategist at Goldman Sachs Group Inc., expressed optimism regarding China’s earnings growth prospects, stating, “We still think this year earnings growth will be decent. We’re looking for about 8%-10% earnings growth.” Lau highlighted the combination of current low valuations, potential policy support from the NPC, and optimistic earnings projections as favorable factors for the market’s performance in the coming months.
In the commodities market, oil prices stabilized near their highest levels this year after OPEC+ extended production cuts to address a global crude surplus. US crude traded around $80 a barrel in Asian markets, maintaining the levels it reached for the first time in almost four months on Friday.
Ahead of a slew of US data releases, Treasury yields experienced slight declines, while Japanese bonds remained relatively unchanged. Additionally, the dollar traded within narrow ranges against its Group-of-10 peers.
The week ahead also promises significant developments in the cryptocurrency market, with Bitcoin briefly breaching the $64,000 level for the second consecutive day. Traders are speculating on the cryptocurrency surpassing its previous record price of almost $69,000, reached during the Covid pandemic.
Looking ahead, traders will closely monitor Tokyo inflation data, Australian growth figures, and the European Central Bank’s policy decision, among other key events. Additionally, attention will be focused on US primary votes, jobs data, and earnings reports from consumer discretionary stocks.
