Asian stock markets presented a mixed picture on Tuesday, with Hong Kong leading the charge as its tech sector continued to surge.
The rally in Hong Kong followed a recent meeting between President Xi Jinping and China’s top business figures, which has sparked optimism that the country’s crackdown on the private sector may be coming to an end.
The Hang Seng Index extended its strong start to the year, boosted by a wave of excitement surrounding DeepSeek, a Chinese startup’s new AI-driven chatbot, signaling a renewed focus on China’s tech and AI industries.
Other markets, including Tokyo, Singapore, Seoul, Taipei, Manila, Bangkok, and Jakarta, also saw gains.
This positive momentum came on the heels of a strong trading day in Europe, where Frankfurt hit a new record. However, Wall Street was closed for a public holiday, and some Asian markets faced losses.
Shanghai, Wellington, and Mumbai saw declines, while Sydney experienced a drop following the Reserve Bank of Australia’s decision to cut interest rates for the first time since 2020. The RBA, however, issued a cautionary note, citing global uncertainties that might hinder further rate cuts in the near future.
The recent tech revival in Asia is helping offset concerns over the impact of US President Donald Trump’s aggressive foreign policies, including tariffs on trade partners.
At the Beijing meeting with Xi, key figures like Alibaba’s Jack Ma, Huawei’s Ren Zhengfei, and BYD’s Wang Chuanfu were in attendance, offering hope that the crackdown on China’s private sector may be winding down.
Xi acknowledged the difficulties faced by the private economy but emphasized that these challenges were temporary and surmountable. He vowed that Beijing would work to remove obstacles to commerce, promote fair competition, and protect business interests.
His remarks have been welcomed by investors, who see them as a sign of a more supportive environment for the private sector.
“The meeting signals that Xi’s crackdown on the tech sector is over, and pro-business policies are on the horizon,” said Tapas Strickland, head of market economics at National Australia Bank.
Alibaba, a key player in the tech rally, rose more than two percent, bringing its gains to over 50 percent since the start of the year.
Read Also: Trump warns Canada of Russian, Chinese threats
Other major tech firms like Tencent and NetEase also saw modest gains. However, some investors are questioning whether the tech rally can maintain its momentum once the stream of positive news slows down.
In the US, Federal Reserve governor Christopher Waller hinted that the central bank might consider interest rate cuts later in the year, depending on inflation trends.
While inflation showed signs of easing last year, Waller urged caution, noting that further rate cuts may be appropriate if the current winter slowdown in inflation proves temporary.
Market Highlights (as of 0700 GMT):
- Tokyo: Nikkei 225 up 0.3% at 39,270.40
- Hong Kong: Hang Seng Index up 1.0% at 22,832.13
- Shanghai: Composite down 0.9% at 3,324.49
- Euro/Dollar: Down at $1.0457 from $1.0483 on Monday
- Pound/Dollar: Down at $1.2598 from $1.2613
- Dollar/Yen: Up at 152.00 from 151.41 yen
- West Texas Intermediate: Up 1.1% at $71.50 per barrel
- Brent Crude: Up 0.3% at $75.42 per barrel
With global economic uncertainties still looming, markets are closely monitoring developments, including potential policy shifts from both China and the US.
