Asian shares gain to avoid US tech worries: Markets close

(Bloomberg) — Asian shares advanced on Tuesday to defy a mixed day on Wall Street as speculation mounted that the tech sector’s rally may be ending.

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Shares in Japan outperformed the region, climbing as much as 1.7%. U.S. stock contracts rose in Asian trade as various U.S. non-tech sectors advanced on Monday. Meanwhile, Nvidia, the chip maker at the heart of the artificial intelligence revolution, extended a three-day run of about $430 billion — crossing the technical threshold of a correction.

In Asia, investors were seen rotating from the technology sector to other parts of the market. They grabbed value stocks in Japan, such as financials, on growing expectations that the country’s central bank will tighten its policy.

Among currencies, the yen strengthened but was still not far from its weakest level in about 34 years. The currency’s top official had warned that the authorities were ready to intervene if necessary, while some traders see the potential for the yen to fall as low as 170 to the dollar. The greenback eased against most of its Group of 10 peers, while Treasuries were steady in Asian trade.

“As we approach the end of the quarter, global investors are rebalancing their portfolios, selling assets that have performed well recently and buying names that have lagged,” said Hideyuki Ishiguro, chief strategist at Nomura Asset Management Co. This is likely to help with wider support. The Topix index, he said.

Chinese machinery stocks rose after President Xi Jinping urged scientists and researchers to step up technological innovation with a greater sense of urgency, citing the dominance of other countries in some key technologies. Speaking at the World Economic Forum, Premier Li Qiang warned of negative consequences if nations parted ways economically, as he hit back at criticism that his country’s industrial policy has led to overcapacity.

In other news, the U.S. is investigating China Mobile, China Telecom and China Unicom over concerns that the firms could exploit access to U.S. data through the cloud and their U.S. Internet businesses by offering it to Beijing, Reuters reported, citing three people unidentified familiar with the matter. .

After a tech-led rally, Deutsche Bank’s Binky Chadha said US stocks are set to stall. There is a lot of good news floating around the markets, and if that optimism turns out to be unwarranted, there could be downside risks, noted Lori Calvasina at RBC Capital Markets. For John Stoltzfus at Oppenheimer, while the bull market looks sustainable, some gains should be expected.

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“A decline in the tech sector is certainly possible, even if the sector does well over the summer months in general,” noted Matt Maley at Miller Tabak. “Even if you agree with the most bullish scenario for the AI ​​phenomenon for the second half of 2024, neither group moves in a straight line.”

In commodities, oil held gains as investors weighed the potential fallout from rising geopolitical tensions. Gold edged lower after closing higher in the previous session with a weaker US dollar adding to the appeal of commodities. Copper rose as investors weighed the prospects for possible stimulus in China after weak fiscal revenue data.

Bitcoin recovered after Monday’s decline. Losses are piling up in the crypto market after the second-worst weekly decline of 2024, a reflection of cooling demand for Bitcoin exchange-traded funds and uncertainty over monetary policy.

This week’s highlights:

• US Conference Board consumer confidence on Tuesday

• The Fed’s Lisa Cook, Michelle Bowman speak Tuesday

• US new home sales on Wednesday

• China’s industrial earnings on Thursday

• Eurozone economic confidence, consumer confidence, on Thursday

• US Durable Goods, Initial Jobless Claims, GDP, Thursday

• Nike releases earnings on Thursday

• Japan Tokyo CPI, unemployment, industrial production, Friday

• US PCE inflation, spending and income, consumer sentiment at the University of Michigan on Friday

• Fed Thomas Barkin of the Fed on Friday

Some of the main movements in the markets:

INVENTORY

• S&P 500 futures were up 0.1% as of 13:07 Tokyo time

• Nasdaq 100 futures rose 0.2%

• Japan’s Topix rose 1.3%

• Australia’s S&P/ASX 200 rose 1%

• Hong Kong’s Hang Seng rose 0.5%

• Shanghai Composite fell 0.4%

• Euro Stoxx 50 futures fell 0.2%

currencies

• The Bloomberg Dollar Spot Index is little changed

• The euro is little changed at $1.0737

• The Japanese yen was little changed at 159.47 per dollar

• The offshore yuan was little changed at 7.2799 per dollar

Cryptocurrencies

• Bitcoin rose 3.1% to $61,344.34

• Ether rose 2.1% to $3,377.48

BONDS

• The 10-year Treasury yield was little changed at 4.23%

• Japan’s 10-year yield was little changed at 0.990%

• Australia’s 10-year yield fell two basis points to 4.20%

wares

• West Texas Intermediate crude was little changed

• Gold in the country fell 0.5% to $2,323.66 an ounce

This story was produced with the help of Bloomberg Automation.

–With the help of Toshiro Hasegawa.

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