Regional markets rebounded in 2024 following a challenging start, which saw a general decline over the previous five sessions due to the underestimation of the Federal Reserve’s potential interest rate reduction.
Further insights into this matter are awaited from upcoming U.S. inflation statistics scheduled for later this month.
Noteworthy observations on provincial inflation have provided some positive indications. Recent data from Japan’s Nikkei 225 index revealed a 1.4% increase following a decline in prices in Tokyo, the country’s central hub, aligning with expectations from December and positioning itself in close proximity to the Bank of Japan.
Despite a devastating earthquake in northern Japan that dampened spirits, some speculate that the Bank of Japan may delay its plans to end ultra-dovish policies to address the aftermath of the disaster.
The Nikkei saw a boost from substantial gains in tech stocks, particularly those involved in artificial intelligence. Advantest Corp. (TYO: 6857), a leading chip testing equipment manufacturer, surged nearly 7%, securing a spot among the top performers on the Nikkei.
Lenovo Group (HK: 0992) experienced a 6.1% increase on Hong Kong’s Hang Seng index after unveiling over 40 new AI-driven products at the Consumer Electronics Show. The Hang Seng index rose by 1%, driven by the strength of technology stocks.
NVIDIA Corporation (NASDAQ: NVDA), a key player in the AI market rally of 2023, soared over 6% to reach record highs on Monday. New Street Research highlighted the stock as one of its top picks for 2024, reigniting interest in AI and benefiting Asian companies.
While broader tech advancements offset a 0.5% decline in Samsung Electronics Co Ltd (KS: 005930), South Korea’s KOSPI rose by 0.3% following a 35% profit surge for the conglomerate in the fourth quarter.
SK Hynix Inc (KS: 000660), a major player in cutting-edge memory chip production for AI applications, saw a more than 2% increase despite indications of potential chip demand challenges in the near future.
Discount hunting significantly contributed to the tech sector’s recovery, which had been hit hard in early 2024 amid concerns of a potential Fed interest rate cut. Lingering doubts persisted ahead of the release of crucial U.S. consumer price index (CPI) data expected to reflect a slight uptick in December inflation.
Expansions were also seen in wider Eastern markets. Australia’s ASX 200 rose by 1.1% following reports of higher-than-expected retail sales figures through November, with a focus on upcoming American CPI price readings scheduled for Wednesday.
In China, the Shanghai Shenzhen CSI 300 index edged up by 0.1% from a five-year low, while the Shanghai Composite index saw a 0.2% increase from a 13-month low. Post this week, Chinese pricing and trade data will come into play.
Chinese shares faced challenges in 2023 due to the country’s struggles with post-COVID economic recovery, positioning them as underperformers in the Asian market.
India’s Nifty 50 index displayed a modestly positive start, poised to recover from significant declines in the initial week of 2024. The focus this week remains on quarterly earnings from key players like Wipro Ltd (NS: WIPR) and Infosys Ltd, along with the release of December Indian CPI data.
