Asian stock markets rose on Tuesday, driven by potential ceasefire talks in Ukraine and a surge in technology stocks, particularly in Hong Kong. The Hang Seng index increased by 0.88%, with Alibaba and other tech firms benefiting from a meeting with President Xi Jinping. In Tokyo, the Nikkei index climbed 0.25%. Meanwhile, oil prices stabilized amid geopolitical tensions, with WTI crude rising to $71.45 per barrel, as the yen weakened against the dollar.
Asian Markets React to Ceasefire Prospects and Tech Stock Surge
Asian stock markets experienced an upward trend on Tuesday, buoyed by the potential for ceasefire negotiations in Ukraine. In particular, Hong Kong’s market saw a significant boost from a rally in technology stocks following a high-profile meeting between President Xi Jinping and key industry leaders.
Hong Kong and Tokyo Stocks on the Rise
As of 06:30 GMT, the Hang Seng index in Hong Kong was up 0.88%, reaching 22,815 points. In contrast, the Shanghai composite index decreased by 0.57%, while the Shenzhen index saw a decline of 1.57%. Tech stocks in Hong Kong have been on a remarkable upswing since January, largely inspired by the unexpected success of Chinese AI newcomer DeepSeek. E-commerce titan Alibaba has surged by an impressive 52% year-to-date.
Attention remained focused on tech stocks following a symposium where President Xi Jinping met with prominent figures such as Alibaba’s Jack Ma, Huawei’s Ren Zhengfei, and BYD’s Wang Chuanfu. Alibaba shares rose by 2.8%, Tencent by 1.7%, and BYD by 2.36%. Meanwhile, Baidu experienced a slight dip of 0.11% ahead of its annual results announcement.
Michael Wan from MUFG Bank summarized President Xi’s remarks, noting the acknowledgment of the challenges faced by private companies and a commitment to easing their burdens. This includes improving access to public markets, reducing financing costs, and alleviating administrative pressures. Although the implementation of tangible measures to invigorate the private sector remains uncertain, the meeting signals a positive shift toward reviving business confidence.
In Tokyo, the Nikkei index closed up 0.25% at 39,270.40 points, while the broader Topix index rose by 0.31% to 2,775.51 points. The Seoul stock exchange also gained 0.63% by the end of trading, whereas Sydney’s market fell by 0.66% following the Australian central bank’s announcement of a rate cut, its first in four years, amid cautious outlooks for the future.
Asian markets have been influenced by the robust performance of European stock exchanges, particularly as the pan-European Euro Stoxx 50 index reached new heights, fueled by stocks in the defense sector. In Tokyo, military and aerospace engineering firm IHI Group saw its shares soar by 6.26%. Analysts from Tokai Tokyo Intelligence highlighted the potential for renewed negotiations between Russia and Ukraine, suggesting that improved investor sentiment could follow hopes for a swift ceasefire.
Should a ceasefire materialize, energy prices, including oil, are likely to decrease, benefiting Japan as it combats imported inflation—a factor that could bolster the Tokyo stock market. Automaker Nissan’s shares surged by 3.65%, following a nearly 6% increase during trading. Reports indicate that rival Honda is open to resuming merger discussions under certain conditions after last week’s failed negotiations.
The Japanese yen fell by 0.31% against the US dollar, trading at 151.98 yen per dollar as of 06:30 GMT. This decline followed profit-taking after the yen’s recent appreciation, which was amplified by the announcement of better-than-expected economic growth in Japan for the fourth quarter of 2024. Experts from Standard Chartered noted that these solid figures have heightened expectations for further rate hikes by the Bank of Japan, potentially enhancing the yen’s attractiveness.
After facing pressure from concerns regarding a resurgence of Russian hydrocarbon supplies in the global market, oil prices are attempting to stabilize. Speculation about a possible delay in production increases by OPEC-exporting countries has contributed to market reassurance. Additionally, Ukraine’s drone strike on a pipeline linking the Caspian Sea to the Black Sea through southern Russia could disrupt regional crude shipments. As of 06:30 GMT, WTI crude prices rose by 1% to $71.45 per barrel, while Brent crude increased by 0.21% to $75.38.