Asian Market Update: Japan’s Nikkei Tops 40,000 as Investors Await China’s National People’s Congress
Asian stocks were mostly higher on Monday as investors eagerly awaited updates from China’s National People’s Congress (NPC), while Japan’s benchmark Nikkei 225 index surpassed the 40,000 level for the first time. The Nikkei briefly rose above 40,000 before settling at 40,150.00, marking a 0.5% increase. This surge comes on the back of Wall Street’s recent gains and is fueled by expectations of strong demand for AI-related technology, an accommodative monetary policy by the Bank of Japan, and a weakened yen boosting profits for exporters.
The focus this week will be on the NPC, where investors are looking for policy updates that could support China’s slowing economy, resolve issues in the property market, and stabilize financial markets. In other parts of Asia, Hong Kong’s Hang Seng index dropped 0.2% to 16,558.00, while the Shanghai Composite index rose 0.2% to 3,033.63. South Korea’s Kospi increased by 1.2% to 2,672.94, following a report showing a slowdown in manufacturing activity. Australia’s S&P/ASX 200 saw a minor decline of 0.1% to 7,598.00, and Thailand’s SET index edged down by 0.1%.
Meanwhile, in the U.S., the S&P 500 gained 0.8% to reach a new high of 5,137.08, driven by optimism about easing inflation and a resilient economy. The Dow Jones Industrial Average increased by 0.2% to 39,087.38, while the Nasdaq composite climbed 1.1% to 16,274.94, extending its record high.
On the corporate front, Dell Technologies made a significant impact on the stock market, with a 31.6% jump in its shares after reporting higher-than-expected profit and revenue. The strong performance was driven by robust demand for its AI-optimized servers. On the flip side, New York Community Bancorp faced challenges, dropping 25.9% due to internal weaknesses in loan review processes.
The spotlight is on the banking sector, especially regional banks, as concerns mount over the potential impacts of high-interest rates on real estate loans. Investors are eagerly anticipating the Federal Reserve’s potential moves to cut interest rates, depending on the cooling of inflation.
In the bond market, the yield on the 10-year Treasury note decreased to 4.20% from 4.25%, reflecting shifts in investor sentiment and economic forecasts.
Turning to commodities, U.S. benchmark crude oil slightly declined to $79.95 per barrel, while Brent crude saw a slight increase to $83.66 per barrel.
In currency markets, the U.S. dollar strengthened against the Japanese yen, reaching 150.16, while the euro rose slightly to $1.0845.
As the week unfolds, investors will be closely monitoring developments in China’s NPC and their potential impact on the global economy.
Analyst comment
Positive news: Japan’s Nikkei tops 40,000, driven by strong demand for AI-related technology, accommodative monetary policy, and weakened yen. Investors await updates from China’s NPC for policies supporting the economy, resolving property market issues, and stabilizing financial markets. US market also performing well, S&P 500 reaches new high, Dow and Nasdaq climb. Dell reports higher-than-expected profit and revenue, while New York Community Bancorp faces challenges.
Short analysis: The Asian market is expected to remain positive as investors anticipate policy updates from China’s NPC. The strong performance of Japan’s Nikkei and the US market, as well as positive corporate results, contribute to market optimism.
