On Tuesday, Asian markets continued their upward trajectory, buoyed by positive momentum from Wall Street. Investors turned their attention to the eagerly anticipated earnings reports from U.S. tech giants, driving optimism across the region. However, the persistent strength of the dollar exerted pressure on the Japanese yen, pushing it to fresh 34-year lows.
The MSCI’s broadest index of Asia-Pacific shares outside Japan advanced by 0.5%, with notable gains seen in Taiwanese shares, which surged by 1%, and Hong Kong’s Hang Seng index, which rose by 0.8%. This positive movement followed a 1% increase the previous day, fueled by reduced concerns about a significant escalation in the Middle East conflict and a partial recovery from the 3.7% losses experienced the previous week. Meanwhile, Japan’s Nikkei edged up by 0.1%.
Tech shares across the region experienced gains, with Taiwan Semiconductor Manufacturing Co Ltd rallying by 1.5% and the MSCI Asia-Pacific ex-Japan IT index jumping by 0.8%. These gains were driven by optimism surrounding the upcoming earnings reports from major U.S. tech companies. However, Chinese shares faced downward pressure, with blue chips recording a loss of 0.6%.
On Wall Street, major tech stocks performed strongly ahead of their quarterly earnings releases scheduled for the week, driving the Nasdaq up by 1.1%. Notable performers included Nvidia, Amazon.com, and Alphabet, although Tesla saw a decline of 3.4% following price cuts in its key markets.
Despite the positive sentiment surrounding corporate earnings, uncertainties persist regarding the Federal Reserve’s monetary policy trajectory and geopolitical tensions. Market participants await key economic indicators such as U.S. gross domestic product figures and March personal consumption expenditure data to gauge the direction of monetary policy. Traders anticipate a Fed rate cut in September, with expected easing for the year totaling 40 basis points, a significant shift from initial expectations at the beginning of the year.
The divergence in interest rate expectations between the U.S. and Europe has contributed to the euro nearing a five-month low against the dollar. Meanwhile, the Japanese yen continued its decline, reaching fresh 34-year lows against the dollar, prompting concerns about potential intervention from Japanese authorities.
Oil prices saw a modest recovery following recent losses, with Brent futures rising to $87.16 a barrel and U.S. crude reaching $82.06 a barrel. However, gold prices experienced a decline, dropping to $2,295.9 per ounce after a 2.7% slump overnight.
Overall, market sentiment remains influenced by a combination of corporate earnings, monetary policy expectations, and geopolitical developments, contributing to ongoing volatility across global markets. Investors continue to monitor these factors closely as they navigate through uncertain market conditions.
