The Hang Seng Index rallied 3.79%, extending its winning streak to an impressive six weeks, the longest since 2019. Investors shrugged off trade war jitters, focusing on Beijing’s stimulus pledges and corporate earnings.
Tech stocks led the gains:
- The Hang Seng Tech Index surged 6.03% in the week, also extending its winning streak to six weeks.
- Alibaba (9988) soared 11.60% after beating revenue forecasts.
- Tencent (0700) gained 9.12% for the week.
However, Baidu (9888) slid by 7.30% in the week. Investors reacted to Baidu’s absence from Beijing’s Symposium and a decline in quarterly revenue.
Mainland China’s equity markets advanced despite ongoing US tariff threats. Hopes of fresh stimulus measures to boost domestic consumption mitigated trade war risks. The CSI 300 and Shanghai Composite Index rose 1% and 0.97% for the week ending February 21.
For more analysis on the Hang Seng Index and global market trends, click here.
Commodities: Gold Hovers Below $3,000; Iron Ore Rebounds
Commodities saw mixed performance during the week ending February 21:
- Gold extended its winning streak to eight weeks, gaining 1.85% to close at $2,936. Significantly, gold struck a new record high of $2,955 before easing back.
- Iron ore spot recovered losses from the previous week, rising 4.25% to $821.64.
- Crude oil ended the week down at $70.557 after sliding 3.39% on February 21 as investors fretted about a potential US economic slowdown.
ASX 200 Slides Amid Weak Bank Earnings and RBA Caution
The ASX 200 slid by 3.03% in the week. A less dovish-than-expected RBA outlook pressured Aussie stocks. Banking stocks were hit hard after disappointing earnings from major lenders.
- The Commonwealth Bank of Australia (CBA) slid by 8.29%.
- National Australia Bank (NAB) plunged 14.42%.
- Westpac Banking Corp. (WBC) tumbled 10.60%.
However, rising iron ore prices provided relief to mining stocks. BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) gained 0.83% and 1.91%, respectively.
Nikkei Index Slips on BoJ Rate Hike Bets and Yen Strength
The Nikkei Index ended the week down 0.81%, pressured by the USD/JPY pair falling 2.01% to 140.226. A stronger Japanese Yen could negatively affect overseas earnings and corporate valuations, especially for exporters.
The Yen strengthened amid rising expectations of a Bank of Japan rate hike. Upbeat Q4 GDP data, a pickup in inflationary pressures, and services sector activity fueled speculation about a more hawkish BoJ rate path.
Softbank Group Ltd. (9984) dropped by 2.56%, while Sony Corp. (6758) and Nissan Motor Corp. (7201) ended the week up 2.91% and 7.78%, respectively. Reports suggested that Nissan is considering attracting Tesla (TSLA) as an investor.
Market Outlook: Key Events to Watch
The upcoming week could be crucial for Asian markets. Economic data, geopolitics, and US tariff developments will be focal points. Key themes to watch include:
- US tariff policy: Progress toward sweeping US tariffs would impact risk sentiment, while de-escalation may trigger market relief.
- China stimulus-related news: Stimulus measures targeting consumption could boost demand for Hong Kong and Mainland China-listed stocks. A lack of stimulus may test buyer appetite.
- Central Bank forward guidance: Hawkish commentary may pressure Asian markets, with the BoJ in focus.
- USD/JPY trends: A sharp drop in the USD/JPY could trigger a Yen carry trade unwind, affecting broader market risk appetite.
Traders should stay attuned to evolving macroeconomic dynamics to navigate shifting market conditions.
