Asia-Pacific Shares Called Higher Following More Record Highs on Wall Street

The major Asia-Pacific stock indexes are expected to open firmer on Tuesday following a flat trade the previous session. Investors are expected to follow Wall Street’s lead which saw the S&P 500 and NASDAQ Composite set more record highs, boosted by a court win for Facebook and broad strength in tech stocks.

Asian shares got the week off to a cautious start on Monday, with Chinese markets holding steady, as a spike in coronavirus cases across the region over the weekend hurt investor sentiment.

In the U.S. on Monday, tech stocks surged, with shares of Apple and Salesforce adding more than 1%. Facebook jumped more than 4% after a U.S. federal court dismissed an antitrust case against the company from the Federal Trade Commission (FTC) and closed with a market cap above $1 trillion. Semiconductor stocks were a bright spot on Monday, with Nvidia rising 5% and Broadcom climbing more than 2%.

Monday’s Cash Market Performance

In the cash market on Monday, Japan’s Nikkei 225 Index settled at 29048.02, down 18.16 or -0.06%. Hong Kong’s Hang Seng Index finished at 29268.30, down 19.92 or -0.07% and South Korea’s KOSPI Index closed at 3301.89, down 0.95 or -0.03%.

In China, the Shanghai Index settled at 3606.37, down 1.19 or -0.03% and in Australia, the S&P/ASX 200 Index finished at 7307.30, down 0.70 or -0.01%.

Japan’s Nikkei Ends Flat as Investors Cautious Ahead of U.S. Data

Japan’s benchmark Nikkei index ended lower on Monday, weighed down by chip-related stocks tracking a muted NASDAQ trade in the previous session, while investors were also cautious ahead of key U.S. economic data due later this week.

”Some key U.S. economic reports such as jobs data will be released later this week, so inventors will remain cautious for the whole week,” Tomoichiro Kubota, a senior market analyst at Matsui Securities, said. “But that does not mean sentiment is bad as other indexes have risen.”

Hong Kong Stocks End Lower as Materials Outweigh Consumer Gains

Hong Kong stocks ended slightly lower on Monday, as losses in energy and materials companies outweighed gains among consumer and healthcare firms.

The sub-index of the Hang Seng tracking energy shares dipped 1.6%, the materials sector lost 2.3%, while the consumer discretionary index and the healthcare sector gained 1.7% and 1.8%, respectively.

China’s Blue-Chip Index ends Higher as Tech Stocks Shine

China’s blue-chip index ended higher on Monday, underpinned by tech gains, as investors hoped for continued policy support.

Tech stocks outperformed on Monday. Shenzhen’s tech-heavy start-up board rose 1.9%, and Shanghai’s tech-focused STAR50 index climbed 1.8%.

Beijing will not change or could even step up its support for the country’s technology sector, which is the biggest good news for related stocks in the A-share market, brokerage Orient Securities said in a report.

In other news, data over the weekend showed profit growth at China’s industrial firms slowed again in May as surging raw material prices squeezed margins and weighed on factory activity.

Profits at China’s industrial firms rose 36.4% in May from a year earlier to 829.92 billion Yuan ($128.58 billion), official data showed on Sunday. That was a slowdown from the 57% surge reported in April, according to National Bureau of Statistics.

For a look at all of today’s economic events, check out our economic calendar.

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James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.