Shares in Hong Kong rose at the open while those in mainland China slipped amid the 14th National People’s Congress. Equity benchmarks were mixed in Japan, while shares fell in South Korea and Australia. Tech equities underperformed the regional stock gauge, with Taiwan Semiconductor Manufacturing Co. and Samsung leading losses. 

“The unimpressive, if not somewhat disappointing stimulus plans in the NPC is at least partly to blame” for weakness in China’s stocks, said Vishnu Varathan, Asia head of economics and strategy at Mizuho Bank.

A press conference with senior officials on Wednesday may provide more details around the government’s effort to boost consumption. Central bank Governor Pan Gongsheng will brief journalists, alongside Commerce and Finance ministry chiefs and the new top securities regulator.

Back in Japan, the nation’s biggest bank expects the Bank of Japan to exit the negative interest rate in two weeks and is positioning itself accordingly. Mitsubishi UFJ Financial Group’s view is much more definitive than the swap market, which rates the chances of BOJ governor Kazuo Ueda changing policy this month at about 50%. 

Australia’s economy slowed in the final three months of last year as elevated interest rates and rising living costs dragged on household spending. 

US benchmark indexes lost traction after a rally that has spurred concern about sky-high valuations, with caution prevailing before Powell heads to Capitol Hill for his semiannual testimony before Congress. Powell is expected to reiterate the lack of urgency to cut rates at his testimony. Wall Street also weighed data showing the US service sector cooled — even as orders and business activity picked up. 

The S&P 500 dropped 1%, while the Nasdaq 100 slipped almost twice as much. Tesla Inc. extended a two-day selloff to 11%, while Apple Inc. suffered its fifth straight loss. Contracts for US equities advanced in early trading.

Treasury 10-year yields steadied in Asia after falling six basis points to 4.15% with Australian and New Zealand yields tracking those moves early Wednesday. A gauge of dollar strength edged higher on Wednesday, gaining against all currencies among the G10. Elsewhere, Bitcoin hit a record Tuesday before reversing, while gold also touched an all-time high.

Bullish positioning in US technology stocks is at the highest in three years, raising the risk of a pullback, according to Citigroup Inc.’s Chris Montagu. Long positioning in Nasdaq 100 futures is “extremely extended,” he said.

The “Magnificent Seven” of US stocks — Apple, Microsoft Corp., Nvidia, Amazon.com Inc., Meta Platforms Inc., Alphabet Inc. and Tesla — have powered the S&P 500 to all-time peaks this year, partly fueled by the artificial intelligence frenzy. The rally has left strategists scrambling to lift their 2024 targets — while raising questions on whether tech is seeing a boom or a bubble.

Elsewhere, oil steadied after a decline as a report showed US inventories are continuing to expand, a sign supply may be running ahead of demand.