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Regional markets took some positive cues from Wall Street as U.S. stocks ended Monday higher on strength in industrials and technology stocks. This spilled over into Asian trade, with regional tech stocks leading gains in early trade.
Asian stocks had logged strong gains on Monday after China rolled out measures aimed at supporting its beleaguered stock market. But the move appeared to have provided a limited boost to Chinese markets, with the country’s benchmark indexes mostly lagging their peers on Tuesday.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes moved little in morning trade after recovering sharply from 2023 lows in the prior session. Beijing had over the weekend said it will halve the stamp duty collected on stock trading in the country, as part of broader measures aimed at helping local equities.
But analysts had warned this would provide a limited boost to local stocks, with the country’s benchmark indexes also trimming a bulk of their gains by the end of trade on Monday.
Focus is now squarely on purchasing managers’ index (PMI) data from the country, due on Thursday and Friday. The readings are expected to offer more cues on a slowing economic recovery in the country, although analysts expect this week’s readings to show little improvement.
But Hong Kong’s Hang Seng index was the best performer among its Asian peers on Tuesday, rising over 1% on a mix of tech strength, improving sentiment towards real estate, and increased deal making activity.
Property developer Country Garden (HK:2007) was the top performer on the index after China introduced more measures to support the beleaguered property sector. The firm also reassured investors that some of its key offshore projects were still on track, helping ease some concerns over a looming debt default.
Hong Kong shares of electric vehicle maker BYD (HK:1211) rose 2.1%, extending gains after it entered a $2.2 billion deal to acquire the Chinese mobility business of U.S.-based manufacturer Jabil. BYD’s profit for the first six months of 2023 also tripled.
Strength in tech stocks aided other Asian bourses, with South Korea’s KOSPI and the Taiwan Weighted index both up 0.3%.
Broader Asian markets kept to a tight range as markets awaited a slew of U.S. economic readings this week. Japan’s Nikkei 225 rose 0.1%, while futures for India’s Nifty 50 index pointed to a flat open.
The Nikkei was also held back by a 0.7% fall in heavyweight Toyota Motor (NYSE:TM) Corp (TYO:7203), after the automaker suspended production at 12 factories due to a system failure.
Australia’s ASX 200 added 0.4%, benefiting from some positive corporate earnings.
Markets remained largely cautious ahead of U.S. inflation, GDP and nonfarm payrolls readings this week, which are broadly expected to factor into the path of U.S. monetary policy.
