Asian equities traded in a tight range after shares in mainland China and Hong Kong rebounded from a selloff in technology stocks.
A gauge of the region’s stocks swung between gains and losses with Chinese technology shares gaining more than 2%, led by Alibaba Group Holding Ltd. and JD.com Inc. Asian stocks had started lower after another disappointing US consumer confidence reading fueled concern about the health of the world’s largest economy.
Chinese shares have risen this year on optimism from gains in artificial intelligence and President Xi Jinping’s meeting with corporate leaders, a move seen as a possible end to the year-long crackdown on the private sector. That contrasts with the decline in US stocks overnight after US consumer confidence fell the most since August 2021 on concerns about the economic outlook.
For Chinese equities, “the positioning is light, valuation is low, and earnings could surprise on the upside,” said Frank Benzimra, a strategist at Societe Generale SA. He said he’ll be watching China’s upcoming policy meetings as well as “US trade policy, and the earnings season.”
President Donald Trump’s move to further decouple economic ties between the two nations has rattled global investors who had bet on a sustained rebound in Chinese stocks.
The yield on 10-year Treasuries was little changed after an 11-basis point move overnight, at its lowest levels since mid-December. Yields on Australian and Japanese bonds also declined in early trading on Wednesday. Money markets are now pricing in more than two quarter-point reductions by the Fed in 2025.
Copper climbed after Trump signed an executive action directing the Commerce Department to examine possible tariffs on the metal.
Investors are awaiting this week’s reading on prices. The Fed’s preferred inflation metric — the core personal consumption expenditures price index — is expected to cool to the slowest pace since June.
Before that, traders will be wading through Nvidia Corp.’s earnings on Wednesday, the most closely watched barometer of the artificial intelligence boom. They will arrive at a critical juncture, with US stocks vulnerable from a technical and systematic standpoint. Nvidia’s shares slid 2.8%.
In other markets, oil in New York steadied after sinking back into the $60s-a-barrel range as a souring economic outlook threatened prospects for energy demand. Gold retreated while Bitcoin fell in early Wednesday trading, extending a 6% slump overnight.
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