Asian equities seek fresh direction on dismal US data
Asian markets rose somewhat in early trade Wednesday as investors sought a clear direction amid lower US consumer sentiment and a late rebound in US shares. Indexes gained in Sydney and Tokyo, with futures pointing to minor increases in Hong Kong. Despite a declining consumer confidence, the S&P 500 rose 0.2% Tuesday after wavering for the majority of the day, marking its longest winning run in over seven weeks. The Nasdaq Golden Dragon China Index fell for the sixth straight day, the most significant losing sequence in almost a year. The 10-year US Treasury yield increased to 4.33% in early Asian trad, after dipping the previous day. Tuesday’s four-day rise ended with little change for the dollar.
The price of copper in the United States reached a record high. Oil prices jumped early on Wednesday after an industry data showed a drop in US stocks. While markets have taken some comfort from President Donald Trump’s recent statements about the “reciprocal” tariffs he plans to announce on April 2, Tuesday’s US economic data only adds to investors’ fears about the world’s largest economy’s development. Also, a world-beating rise in Chinese technology stocks is quickly cooling as the initial shock of DeepSeek’s AI model wears off, placing a well followed benchmark on the verge of a correction.
“Treading lightly may still be the mantra opted for by financial markets until we see who or what gets excluded from Trump’s next tariff hit-list,” stated Tim Waterer, chief market analyst at Kohle Capital Markets. The Nasdaq 100 climbed 0.5% on Tuesday. A barometer of tech megacaps rose 1.2% as Tesla Inc. extended its five-day rally to 28%, while Nvidia Corp. declined. Market experts are divided on whether the stocks bounce will continue. HSBC Holdings Plc strategists, lead by Max Kettner, downgraded US stocks to underweight, citing economic worries. Meanwhile, JPMorgan Chase & Co.’s Ilan Benhamou said it’s appropriate to suspend the rally-fading strategy as tariff certainty reduces some significant risks.
“Confidence is a fragile thing,” remarked Steve Sosnick from Interactive Brokers. “Despite the growing functions of algorithms and artificial intelligence in the investment process, feelings still play a substantial part in market behavior.” According to Matt Maley of Miller Tabak, the rebound from a US selloff has been positive, but investors must remain confident that the worst is behind them.
“Markets in the near term will be choppy,” warned Charles Ashley of Catalyst Funds. “There is some paralysis among market players who are unsure what policy will be implemented. We haven’t reached the stage where there are huge pricing dislocations to uncover very attractive possibilities.” Consumer mood polls have recently been negative, as people fear that Trump’s tariffs would cause inflation to rise again. Companies have warned of increasing costs and lower demand, which coincides with experts’ expectations of stagflation and rising probabilities of recession.
