Asian markets were mixed on Tuesday despite an overnight rally in technology shares on Wall Street.
Stocks in China and Hong Kong drop after US action
China’s Shanghai Composite Index and blue chip CSI 300 were having a volatile session at the bourses on Tuesday.
This comes as the United States listed Tencent Holdings Ltd. and Contemporary Amperex Technology Co. Ltd., as companies with alleged links to the Chinese military.
Tencent’s Hong Kong-listed shares dropped as much as 7% in early trade, while its US-traded shares fell 8% in over-the-counter trading.
Tencent, the parent company of WeChat, stated that its inclusion on the list was “clearly a mistake,” emphasising, “We are not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on our business.”
CATL, the world’s largest electric vehicle battery maker, saw its Shenzhen-listed shares fall over 5%.
The company also dismissed the designation as a mistake, asserting that it “is not engaged in any military-related activities.”
The move added to ongoing geopolitical tensions, contributing to unease in the yuan’s performance.
Hong Kong’s Hang Seng Index also crashed over 1.5%, reflecting investor concerns over the broader implications of US sanctions on Chinese companies.
Japan’s Nikkei makes a comeback
Japan’s Nikkei made a strong comeback at the bourses after it closed over 1% lower on the first trading day of 2025.
Nikkei Average surged 2.3% as the yen fell to its weakest level since July 2024 against the dollar.
The weaker currency bolstered export-driven shares, providing a significant boost to the market.
Other Asian Markets
South Korea’s Kospi Average climbed over 1% at over 2,500, fueled by strong earnings from Foxconn, the world’s largest contract manufacturer of Apple iPhones.
This is the first time the KOSPI has surpassed the 2,500 level since December 16.
Foreign investors have recorded net buying for more than two consecutive days, a streak last seen 83 days ago on October 14-15.
The company reported record fourth-quarter revenue, exceeding market expectations and lifting sentiment across tech-related sectors.
Australia’s S&P/ASX 200 gained 0.3%, driven by modest advances in technology and financial shares. However, declines in the mining sector tempered broader market gains.
Wall Street’s tech rally on Monday
Stocks moved sharply higher early Monday but retreated throughout the session, with the major averages closing mixed.
The tech-heavy Nasdaq rose 243.30 points, or 1.2%, to 19,864.90, and the S&P 500 added 32.91 points, or 0.6%, to 5,975.38.
However, the Dow slipped 25.57 points, or 0.1%, to 42,706.56.
The early rally was driven by strong gains in tech stocks, following Foxconn’s report of record fourth-quarter revenue fueled by robust AI server demand.
Nvidia, Foxconn’s assembly partner, rose 3.4%, while Micron surged 10.5%.
Market sentiment also improved after a Washington Post report suggested President-elect Donald Trump may scale back his tariff plans.
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