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Investing.com — Most Asian stocks rose on Monday, with Japanese stocks leading the way as hype around AI spurred investors into tech bets, but Chinese markets balked at lingering concerns about a slowing economic recovery. The decline continued.
Regional stocks continued the positive flow from Wall Street after U.S. stock benchmarks hit record highs on Friday on the back of big gains in the tech sector. Buying in technology was primarily driven by expectations that rising demand for artificial intelligence developments would stimulate renewed interest in the field.
Japan leads with tech gains, Bank of Japan bets dovish
Japanese stocks were the biggest beneficiary of this idea, rising 1.2% to a 34-year high, while Japanese stocks rose 0.7% to trade at their highest since 1990.
Yamaha Motor Co., Ltd. (TYO:) jumped 5.4% to a record high on the Nikkei after announcing a deal to acquire German electric motor maker Torqeedo. Germany AG (F:) – A sign that traditional motorcycle manufacturers are planning further expansion into the electric vehicle market.
The broad strength in Japanese stocks was fueled by growing confidence that Japan will largely maintain its ultra-dovish policy at the end of Tuesday’s meeting.
The dovish BOJ remains the main support for Japanese markets, given that Japan’s financial conditions remained ultra-easy even though most other major central banks have started raising interest rates over the past two years. became.
Major Japanese tech stocks, particularly those with exposure to the semiconductor manufacturing sector, also posted strong gains. Advantest Co., Ltd. (TYO:) and Tokyo Electron (TYO:) added 3% and 1%, respectively.
Asian tech markets soar as AI hype counters high interest rate concerns
Asian markets were buoyed mainly by gains in tech stocks on Monday, after TSMC (TW:) (NYSE:), the world’s largest contract chip maker, gave a positive outlook for 2024 on the back of AI demand. Broad Asian markets rose.
Positive comments from the company sparked a big rally in global semiconductor manufacturing stocks last week, a rally that lasted through Monday.
Korean semiconductor giant Samsung Electronics Co., Ltd. (KS:) And SK Hynix Co., Ltd. (KS:) each rose more than 1%, but the overall index was flat.
Optimism about AI also helped the tech industry weather growing expectations that the Federal Reserve will keep interest rates high for an extended period of time. Traders are now pricing in a higher chance of the Fed keeping interest rates unchanged in March, compared with previous expectations of a 25 basis point cut, the researchers found.
In Australia, gains in the tech sector supported a 0.5% rise despite weakness in major mining stocks. Rare earths miner Linus Rare Earths Ltd (ASX:) fell 1.8% after quarterly sales fell by more than 50% due to weak demand in China.
Chinese stocks lag as economic uncertainty continues
Chinese stocks remain an outlier among their Asian peers, trading in a flat-to-low range on Monday amid continued concerns about the country’s slowing economic recovery.
The blue-chip stock index rose 0.2% from a five-year low and fell 0.5%. The Hong Kong index fell 1.4%, hitting a 15-month low as mainland stocks fell.
Chinese stocks were Asia’s worst performer through 2023 as the post-COVID-19 economic recovery largely failed to materialize. Recent data shows continued weakness in the country, with losses expected to extend into 2024.
The People’s Bank of China on Monday kept the benchmark at its lowest level on record, suggesting there is limited room to ease financial conditions and support economic growth.
Elsewhere, Indian markets were closed for a special holiday commemorating the inauguration of a temple in northern India. Futures markets pointed to further weakness in the index after it was hit by a wave of profit-taking last week.
Traders were also nervous about the possibility of communal violence in the country due to the inauguration of the temple, which is a controversial topic in Hindu-Muslim relations.
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