Asian Stocks Rise Amid US-China Trade War

Asian Markets Rise Amidst US-China Trade Tensions

Asian stock markets saw gains as traders grappled with the ongoing US-China trade war and earnings reports from major US [[tech]] companies. Chinese markets are set to reopen on Wednesday.

Shares in Australia and Japan rose, along with stock futures for Hong Kong. However, US equity contracts dipped slightly as Alphabet Inc. (Google’s parent company) and Advanced Micro Devices Inc. experienced declines in after-hours trading. US stock indexes had earlier rebounded with a 1.7% increase in a Bloomberg gauge of the “Magnificent Seven” megacaps. Treasury yields also saw an uptick.

Latest Round of US-China Trade War Begins

The latest US-China trade war began with US tariffs on China taking effect. China immediately responded with more tariffs on about 80 US products, set to start on Feb. 10. Traders, however, are optimistic that upcoming discussions could de-escalate the situation.

Todd Ahlsten at Parnassus Investments suggested, “There is a possibility that the final effect of these tariffs might be less than what we expect. These tariffs may be just the beginning of a negotiation, which could lessen their overall impact.”

Indian Exporters Eyeing New Opportunities

Indian exporters are looking at new opportunities arising from the US duty imposition on China, Canada, and Mexico. This development in the global market has opened up potential new avenues for Indian businesses.

Chinese Markets on Edge as Trade War Unfolds

Chinese traders are anxiously awaiting Wednesday’s market reopening as the trade war adds uncertainty. Volatility is anticipated to remain high, as investors prepare for a potential escalation while simultaneously hoping for a resolution. The offshore yuan showed some recovery after an initial drop, and Hong Kong-listed Chinese stocks have demonstrated resilience. A gauge of US-listed Chinese companies also increased by 2.7%.

Kenny Ng, a strategist at China Everbright Securities International, commented, “The market’s uncertainty about tariffs is now cleared, and we have a better picture. I believe Chinese stocks will have a relatively strong opening.”

Other Global Market Developments

Elsewhere, a former executive director at the Bank of Japan indicated that the bank might raise its benchmark rate higher than the current market consensus. The yen strengthened to around 154 per US dollar. In commodities, oil prices saw a slight dip as worries about the trade war’s impact on global growth overshadowed news of stricter sanctions on Iran.

Key Events and Market Moves This Week

Several important economic events and data releases are scheduled for this week, including PMI data, trade figures, and US jobs reports. Earnings reports from major companies like Amazon are also expected. In early trading, S&P 500 futures and Nasdaq 100 futures experienced slight declines, while Hang Seng futures, Topix, and S&P/ASX 200 showed gains. Currency markets remained relatively stable, and cryptocurrencies like Bitcoin and Ether saw increases.

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