(Bloomberg) — Asian stocks rose for a third day, buoyed by advances in Japanese shares and as investors placed fresh bets on Chinese tech companies.
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Hong Kong equity benchmarks outperformed in Asia with gains around 2%, boosted by BYD Co. shares at a record after it unveiled a new charging system for electric cars. Japanese gauges were up more than 1%. That’s after US stocks climbed for a second day, as industrial and energy shares rallied.
China’s world-beating stock rally may get a fresh catalyst from a slew of tech earnings, with Xiaomi Corp. and Tencent Holdings Ltd. set to report this week. While Beijing’s briefing on bolstering consumption was seen as disappointing by some, Tuesday’s market reaction suggests investors remain positive over the outlook. BYD’s tech advancement also reinforces a narrative of the global competitiveness of Chinese companies.
Things are pointing to a slowdown in the US, but in China “the direction of travel is very much looking to stimulate growth,” Richard Harris, founder and CEO of Port Shelter Investment Management, said on Bloomberg TV. “So I’m very much in the corner of saying, we’re looking at the great pivot from the US to China at the moment.”
The yield on 10-year Treasuries was little changed after slipping one basis point to 4.30% on Monday. The Bloomberg Dollar Spot Index edged higher. US equity futures slipped in Asia trading.
In Japan, shares of the biggest trading houses rallied after Berkshire Hathaway Inc. increased its stake. Financial stocks also gained along with elevated yields ahead of the Bank of Japan’s decision on Wednesday. The central bank is expected to keep the policy rate at 0.5%, according to economists surveyed by Bloomberg.
“The BOJ must be closely watching steep gains in yields,” said Junki Iwahashi, senior economist at Sumitomo Mitsui Trust Bank. “So close attention will be warranted on Ueda’s comments about that when he speaks at the briefing,” he said, referring to the BOJ governor.
In other news, President Donald Trump said Chinese leader Xi Jinping would visit Washington soon, amid brewing trade tensions between the world’s two largest economies.
Retail Sales
The S&P 500 and the Nasdaq 100 rose about 0.6% each on Monday, as gains in small-cap stocks outweighed a slide in the Magnificent Seven cohort.
US retail sales rose by less than forecast in February and the prior month was revised lower. However, the so-called control-group sales — which feed into the government’s calculation of goods spending for gross domestic product — increased 1% last month, reversing the previous drop.
“While recession chatters may seem overblown for now, the US economy remains on a slowing trajectory, keeping valuations under close scrutiny” said Jun Rong Yeap, a market strategist at IG Asia.
A sense of wait-and-see may emerge from policymakers this week, in their first assessment of how Trump’s trade policies are impacting the economy. With Fed officials expected to hold rates steady on Wednesday, the market will focus on officials’ updated economic projections and Chair Jerome Powell’s press conference for clues on the path ahead.
Meanwhile, oil steadied after a two-day gain, with the outlook for China’s economy and geopolitical risk in the Middle East remaining in focus. Gold held near $3,000 an ounce.
Key events this week:
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US housing starts, import price index, industrial production, Tuesday
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Bank of Japan rate decision, Wednesday
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Federal Reserve rate decision, Wednesday
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China loan prime rates, Thursday
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Bank of England rate decision, Thursday
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US Philadelphia Fed factory index, jobless claims, existing home sales, Thursday
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Eurozone consumer confidence, Friday
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Fed’s John Williams speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.2% as of 10:43 a.m. Tokyo time
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Japan’s Topix rose 1.6%
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Australia’s S&P/ASX 200 rose 0.3%
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Hong Kong’s Hang Seng rose 1.9%
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The Shanghai Composite rose 0.2%
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Euro Stoxx 50 futures rose 0.4%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0915
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The Japanese yen fell 0.2% to 149.48 per dollar
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The offshore yuan was little changed at 7.2318 per dollar
Cryptocurrencies
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Bitcoin fell 1% to $83,091.42
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Ether fell 1.7% to $1,903.01
Bonds
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The yield on 10-year Treasuries was little changed at 4.29%
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Japan’s 10-year yield was unchanged at 1.505%
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Australia’s 10-year yield declined one basis point to 4.40%
Commodities
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West Texas Intermediate crude was little changed
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Spot gold rose 0.1% to $3,004.85 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Paul Allen, Haidi Lun and Winnie Hsu.
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