Asian markets experienced an uptrend on Tuesday, positively influenced by Wall Street’s recent rally. Japan’s Nikkei 225 surged 1.2%, closing at 37,845.42. Investors are closely monitoring the Bank of Japan, anticipating its decision to maintain the current interest rate at the monetary policy board meeting scheduled to conclude on Wednesday. Similarly, the U.S. Federal Reserve is also expected to disclose its latest interest rate stance this Wednesday.
In Japan, key trading corporations saw share price increases following reports that Warren Buffett’s Berkshire Hathaway has expanded its stakes in these firms. Itochu Corp. noted a 2.5% rise, Marubeni Corp. climbed 3.5%, Mitsubishi Corp. advanced by 3.6%, while Mitsui & Co. appreciated by 3.1%. Although Berkshire Hathaway’s stakes remain under 10% in each of these companies, the investments are perceived as a vote of confidence in the Japanese economy.
Across Asia, Hong Kong’s Hang Seng Index leaped 2.2% to 24,670.80, spurred by a wave of buying in tech stocks. The Shanghai Composite edged higher by 0.1%, reaching 3,431.06. Australia’s S&P/ASX 200 experienced a slight gain of nearly 0.1%, closing at 7,860.40, and South Korea’s Kospi increased by less than 0.1% to 2,612.34.
In contrast, Indonesia’s stock exchange experienced a temporary halt in trading when the benchmark JSX dropped as much as 6%. It later regained some ground, settling at a 3.5% decline. Investor apprehension has been visible in state-owned banking stocks, particularly after the government unveiled a new sovereign wealth fund, Danantara, which has yet to garner widespread approval. Economic uncertainties exacerbated by U.S. President Donald Trump’s tariff policies and other risks have further fueled concerns, as highlighted by Budi Frensidy from the University of Indonesia.
In the U.S., Wall Street witnessed another session of gains on Monday. The S&P 500 increased by 0.6% to 5,675.12, marking a second consecutive day of recovery after recent losses. The Dow Jones Industrial Average rose 0.9% to 41,841.63, and the Nasdaq composite experienced a 0.3% lift to 17,808.66. Intel saw a substantial 6.8% uptick attributable to the appointment of Lip-Bu Tan, a seasoned figure in the semiconductor industry, as CEO. Meanwhile, PepsiCo shares grew by 1.9% following its announcement of a $1.65 billion acquisition of Poppi, a prebiotic soda brand.
These positive moves helped counterbalance a 4.8% fallback in Tesla’s stock. Concerns over the company’s association with Elon Musk, who has been prominent in advocating governmental budget reductions, have affected Tesla’s performance. The brand and its outlets have faced backlash correlating with discontent against Trump and his administration.
Broadly, stocks have faced downward pressure over risks associated with Trump’s tariff announcements and unpredictable policies. These could potentially deter consumer and business spending, harming economic growth. The decline in confidence has been supported by surveys and early warnings from businesses about shifting consumer behavior. Despite this, recent reports indicated weaker-than-expected sales in the U.S. retail sector, primarily due to slower auto sales and reduced fuel costs.
Despite talks of a possible economic slowdown and potential recession, late last year’s economic indicators were strong. While hiring remains robust, ongoing economic chatter could hamper confidence levels. Few anticipate any rate changes from the Federal Reserve on Wednesday. The institution has held rates steady throughout the year, opting to assess unfolding economic conditions. Last year’s strategy involved steep rate cuts to alleviate economic strain following high inflation.
In energy markets, U.S. crude rose by 35 cents, reaching $67.93 per barrel, while Brent crude saw a 38-cent increase to $71.45 per barrel. Currency markets showed the U.S. dollar slightly gaining against the Japanese yen, moving to 149.74 yen from 149.21 yen. Meanwhile, the euro remained steady at $1.0922.
