Asian stocks mixed as Japan, China reopen after holidays
Asian equities trade mixed on Tuesday as Japan and China markets return after holidays. The Nikkei 225, Japan’s benchmark, rose 0.90% to 57,346. Japanese Trade Minister Ryosei Akazawa talked with US Secretary of Commerce Lutnick, reaffirming during a call on Monday that the two countries would continue to implement the agreement reached last year "in good faith and without delay.”
The call between Akazawa and Lutnick followed the US Supreme Court's decision last Friday to strike down US President Donald Trump's tariff program. In response, Trump raised tariffs to 15% on imports from all countries.
Trump on Monday warned countries against backing away from recently negotiated trade deals with the US, saying that he would hit them with much higher duties under different trade laws.
The Wall Street Journal (WSJ) reported on Monday that Trump's administration is considering new national security tariffs on a half-dozen industries. The source said that the new tariffs, to be issued under Section 232 of the Trade Expansion Act of 1962, would be separate from a 15% global levy Trump announced on Saturday.
China's stock markets also edged higher on their return from the Lunar New Year holidays. The SHANGHAI, China’s main stock market index, jumped 1.17% to 4,130. The Shenzhen stock exchange climbed 1.82% to 14,356. On the other hand, the Hong Kong Stock Exchange fell 1.93% to 26,558.
Shares in South Korea rose nearly 2.0%, and Taiwan jumped 2.58% as traders piled into chipmakers, viewing them as the “picks and shovels” of the AI supply chain.
India’s Nifty50 declined 0.74% to trade at 25,525 on Tuesday. Other markets in Southeast Asia were mixed. Australia's S&P/ASX 200 was down 0.11% to 9,015.
AsianStocks FAQs
Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.
Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.
Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.
Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.
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