Asian Markets Rally Following Wall Street's Positive Close and Strong Chinese Factory Signals

BANGKOK (AP) — Asian shares kicked off the week with strong gains, buoyed by Wall Street's positive performance that marked the end of a tough February.

Additionally, encouraging factory data from China helped boost market sentiment, contributing to a solid start for March.

In Hong Kong, shares of the popular bubble tea brand Mixue Bingcheng surged by 40% following its notable $444 million initial public offering (IPO). Local reports indicated it achieved a record local subscription level, exceeding 1 trillion Hong Kong dollars (approximately $128 billion).

The Hang Seng Index in Hong Kong rose 1.2%, reaching 23,222.88, while the Shanghai Composite Index saw a 0.3% increase to 3,332.27.

In Tokyo, the Nikkei 225 index climbed 1.4% to 37,662.14. Meanwhile, South Korean markets were closed for a holiday, and Australia's S&P/ASX 200 index gained 0.6%, reaching 8,220.80. Conversely, Taiwan’s Taiex dropped by 1.4%, and the SET Index in Bangkok fell by 0.7%.

Recent surveys of Chinese factory managers revealed improvements in conditions as new orders increased. This resurgence is likely due to companies acting quickly to avoid rising tariffs on exports to the United States, where the Trump administration recently raised import duties on Chinese goods to 20%.

On Wall Street, the S&P 500 jumped 1.6%, closing at 5,954.50. The Dow Jones Industrial Average gained 1.4% to reach 43,840.91, while the Nasdaq Composite rose 1.6% to 18,847.28.

Earlier in the week, the S&P 500 had fallen in five of the past six trading sessions due to disappointing economic reports and concerns surrounding President Trump's tariffs, which had pushed the index down from its all-time high achieved the previous week.

Stocks related to the artificial intelligence sector experienced significant declines, and Bitcoin saw a steep drop of over 20% from its peak. However, on Friday, Nvidia rebounded by rising 4% after an 8.5% decline the day before, playing a strong role in advancing the S&P 500.

As of early Monday, Bitcoin was trading around $92,760 after previously hovering near $84,000 on Friday.

The stock market rally followed the release of an economic report showing mixed results. Inflation across the U.S. eased somewhat, aligning with economists' expectations, according to the Federal Reserve's preferred inflation measure. This is seen as favorable news for the market, as it could provide the central bank with flexibility to consider interest rate cuts later in the year.

After implementing significant rate cuts late last year, the Fed has kept rates steady so far this year, primarily due to concerns about persistent inflation.

Additionally, the report revealed that U.S. households reduced their spending in January, which could hinder a crucial engine propelling the economy and stave off a recession amid high interest rates. Although inflation remains elevated, it is currently not as severe as it was at its peak in 2022. Worries surrounding tariffs and other policies introduced by Trump may exacerbate living costs.

There is hope among Wall Street that the ongoing discussion about tariffs could merely be a negotiating strategy by Trump, intending to reduce the potential impact on the global economy.

Nonetheless, reports suggest that consumer sentiment is already preparing for higher inflation in the future, which could influence spending behavior and create economic challenges, even without new tariffs.

Concerns about uncertainty surrounding tariffs, as well as the potential for deregulation and other government measures, relate to a growing sentiment noted by economists at Bank of America, who suggest that trust in market-friendly policy might continue to erode.

Much of the decline in consumer spending in January may have been attributed to unusually cold weather and other anomalies. However, it comes on the heels of several signals indicating a slowdown in the U.S. economy, which had closed 2024 performing solidly.

On other fronts early Monday, U.S. benchmark crude oil saw an uptick of 42 cents, trading at $70.18 per barrel, while international Brent crude rose by 43 cents to $73.24 per barrel.

The U.S. dollar dipped to 150.46 Japanese yen after being at 150.72 yen, while the euro climbed to $1.0420 from $1.0402.

Asian, Markets, WallStreet