The Asian market was quiet on Monday due to a Wall Street Holiday, which kept the trading volume low. Meanwhile, the US Dollar fell after disappointing retail sales figures.
Tencent’s shares also surged following the announcement of AI advancements made in Weixin, its messaging app.
Reports suggest that Russia and Ukraine peace talks may begin this week in Saudi Arabia.
Also, the uncertainty surrounding potential US tariffs for foreign products continues to affect sentiment. This is especially true if levies are based on other country’s value added tax systems.
Asia’s stock market performance has remained steady despite these risks.
The broadest MSCI index for Asia-Pacific stocks rose 0.1% while Japan’s Nikkei remained flat due to the stronger yen.
South Korea’s stock markets rose 0.2% and Hong Kong’s stocks rallied, driven by the optimism surrounding China’s artificial intelligence sector.
Tencent’s shares soar as China’s AI industry gains momentum
Tencent was the standout in this region. Its shares rose 6.6% when it announced that Deepseek, an AI startup on the rise in China, had started beta testing its Weixin app.
Tencent opened its stock at HK$506, the highest since July 2021.
Hong Kong’s Hang Seng Index increased by 0.6% while the Hang Seng Tech Index grew 1.3%. This is a continuation of last week’s 7.4% increase.
Alibaba’s stock, which surged by 24% following the announcement of its AI partnership, will report on earnings Thursday. The market expects a swing either way in any direction between 7.5% and 8.5%.
The dollar weakens amid Fed rate cut speculation
As weak retail sales numbers revived the bets, that Federal Reserve rates could drop twice this year due to a Federal Reserve rate cut.
Last week, the dollar index was at 106.84. This represents a decline of 1.2%.
Meanwhile, the euro remained steady at $1.0485, while the Japanese yen strengthened to 152.02 per dollar after Japan reported stronger-than-expected GDP growth of 2.8% in Q4.
Treasuries rose, and the yield on 10-year Treasury notes held at 4,478%. This is well below the high reached last week of 4,660%.
The markets will be closely watching the Fed Minutes release on Wednesday as well as speeches by at least six Federal Reserve officials to get further clues about monetary policy.
Commodity Markets: Oil slips and gold shines
The gold price hovered at a record-high of $2,879 an ounce as investors continued to seek safe havens.
Meanwhile, the oil price declined due to speculation about peace negotiations in Ukraine, and this could result in a relaxation of Russian supply restrictions.
Brent crude fell by 36 cents per barrel to $74.38, while US crude declined 42 cents per barrel to $70.32
Key data and upcoming central bank decisions
The Reserve Bank of Australia is expected to reduce rates by up to 25 basis points. New Zealand could choose a cut of 50 basis points.
In the UK, key economic indicators–including employment, wage growth, and inflation data–will influence expectations for the Bank of England’s next move. Andrew Bailey, the Governor of the Bank of England is scheduled to also speak. This could give further insight into policy.
Investors continue to focus on central bank and corporate actions as they navigate global market shifts in monetary policies and trade uncertainty.
The post Asian Market Update: Stocks stay steady as Dollar Retreats; Tencent Surges on AI Expansion may be updated as new updates are released.
