Hong Kong (AFP) – Asian markets were mixed Tuesday with Hong Kong resuming its tech-led rally after a meeting between President Xi Jinping and China’s top business leaders fanned hopes that a long-running crackdown on the private sector is coming to an end. The Hang Seng Index’s gains extended an impressive start to the year, with the emergence of a new chatbot from Chinese startup DeepSeek stoking optimism in the country’s AI drive. The tech revival has also helped offset worries about the impact of US President Donald Trump’s hardball foreign policies and decision to impose sweeping tariffs on trade partners.
Among the luminaries meeting Xi in Beijing were Alibaba co-founder Jack Ma, Huawei founder Ren Zhengfei, and Wang Chuanfu, CEO of electric vehicle giant BYD. Since taking the helm, Xi has strengthened the role of state enterprises in the world’s second-largest economy and waged crackdowns on areas of the private sector undergoing “disorderly” expansion. The drive has hammered some of the country’s biggest names in recent years, sending their share prices plummeting. State news agency Xinhua reported that Xi had “stressed that the difficulties and challenges currently faced by the development of the private economy have generally appeared during the process of reform and development, and industrial transformation.”
“They are partial rather than general, temporary rather than long-term, and surmountable rather than unsolvable,” Xi said, according to Xinhua. He added that Beijing was focused on removing obstacles to commerce, promoting fair competition, cracking down on arbitrary fines, and protecting business interests. Monday’s gathering provided some much-needed relief to investors and fanned hopes for a sector revival. “This was seen as a strong signal that his crackdown on the tech sector is over and with forthcoming pro-business policies to help revive the economy,” said National Australia Bank head of market economics Tapas Strickland. Ma’s inclusion hinted at the billionaire magnate’s potential public rehabilitation after years out of the spotlight following a tangle with regulators.
Asian markets started the day fast out of the blocks, though they struggled to maintain momentum and some turned negative. Hong Kong pared an early flurry as traders took cash off the table after a strong run-up so far this year. Still, Alibaba rose more than two percent and has now piled on more than 50 percent since the turn of the year. Games developer XD Inc surged more than 10 percent, while Tencent added two percent and NetEase nearly three percent. “As this tech-led rally continues, investors are left wondering: Can the upward momentum of Chinese tech stocks sustain as the flood of positive news subsides?” asked Pepperstone research analyst Dilin Wu. “Has the market reached an inflection point for a full-scale ‘Buy China’ strategy? And what risks lie ahead?”
Tokyo, Singapore, Seoul, Taipei, Manila, and Jakarta also rose, with Frankfurt extending Monday’s record gains. London and Paris were also higher. However, there were losses in Shanghai, Wellington, Bangkok, and Mumbai. Sydney fell as the Reserve Bank of Australia announced its first interest rate cut since late 2020 but warned global uncertainties would make it hard for officials to follow up with any more anytime soon. Wall Street was closed for a holiday.
Meanwhile, Federal Reserve governor Christopher Waller suggested the US central bank could cut interest rates this year if inflation performs as it has in the past, pointing to last year’s spike in the winter followed by a quick easing. “If this wintertime lull in progress is temporary, as it was last year, then further policy easing will be appropriate,” he said in prepared remarks due to be delivered on Tuesday in Sydney. “But until that is clear, I favour holding the policy rate steady.” With prices showing signs of ticking back up in recent months, traders have scaled back their bets on how many reductions officials would make this year. “The data are not supporting a reduction in the policy rate at this time,” Waller said. “But if 2025 plays out like 2024, rate cuts would be appropriate at some point this year.” His remarks come amid fears that Trump’s plans to impose tariffs and slash taxes, regulations, and immigration will reignite inflation.
**Key figures around 0815 GMT**
– Tokyo – Nikkei 225: UP 0.3 percent at 39,270.40 (close)
– Hong Kong – Hang Seng Index: UP 1.6 percent at 22,976.81 (close)
– Shanghai – Composite: DOWN 0.9 percent at 3,324.49 (close)
– London – FTSE 100: UP 0.2 percent at 8,783.28
– Euro/dollar: DOWN at $1.0465 from $1.0483 on Monday
– Pound/dollar: UP at $1.2618 from $1.2613
– Dollar/yen: UP at 152.08 from 151.41 yen
– Euro/pound: DOWN at 82.94 pence from 83.11 pence
– West Texas Intermediate: UP 0.8 percent at $71.33 per barrel
– Brent North Sea Crude: UP 0.1 percent at $75.31 per barrel
– New York – Dow: Closed for a holiday
© 2024 AFP
