A bull statue in front of the Shenzhen Stock Exchange building in Shenzhen, China on Tuesday, May 7, 2024. (Photo: Raul Ariano/Bloomberg) All major Asia benchmarks climbed, led by Japan, Australia and South Korea. The S&P 500 has now set 30 all-time highs this year, defying concern about narrow breadth that may make the market more vulnerable to surprises.
Asia chip stocks were among the biggest contributors to gains in the MSCI Asia Pacific index. Shares of Tesla China suppliers advanced after news the electric-car maker had gained approval to test its advanced driver-assistance system on some Shanghai streets. In South Korea, shares of SK Hynix Inc. rose to a 24-year high as an analyst said the chipmaker may see upward revisions to its future earnings consensus.
Australia’s central bank will keep its benchmark interest rate at a 12-year high of 4.35% for a fifth straight meeting Tuesday, according to a Bloomberg survey of economists. The nation’s 10-year bond yield climbed two basis points to 4.13%. The Australian dollar halted a three-day decline ahead of the decision.
Hong Kong said it will allow trading to continue during typhoons from 23 September.
“It shows HKEX’s commitment to maintaining market operations and improving efficiency under adverse conditions, which aim to improve Hong Kong stock market’s liquidity, and enhance competitiveness compared to other global financial hubs,” said Fanwei Zeng, investment analyst at GAM Investment Management.
Ahead of Wednesday’s holiday in the US, traders geared up for retail-sales data and a slew of Federal Reserve speakers. Treasuries ticked higher in Asia after falling on Monday amid a flurry of high-grade corporate bond sales that exceeded $21-billion. The dollar was little changed.
“We do expect the dollar to remain pretty resilient on a short-term basis, largely because of the fact that, all the other central banks or the major central banks, like for example, the ECB will probably be cutting rates first,” Kelvin Tay, regional chief investment officer of UBS Global Wealth Management, said in an interview on Bloomberg Television
The US benchmark index topped 5,470 on Monday, with Tesla Inc. and Apple Inc. leading gains in megacaps. The Nasdaq 100 came closer to the 20,000 mark as Micron Technology Inc. climbed to a record after some firms raised their targets.
“We believe the S&P 500 can reach 6,000 by year-end as the combination of better earnings and one or two rate cuts is like a turbo booster for stock prices,” said James Demmert at Main Street Research. “The Fed may not need to cut rates this year but if they do, it will be even more bullish for equities, particularly tech.”
Optimism over a resilient economy, improving corporate earnings and the potential start of rate cuts have pushed US equities up about 15% this year. Fed Bank of Philadelphia president Patrick Harker said he sees one rate cut as appropriate for this year based on his current forecast.
Investors will keep a close watch on the implications of Beijing’s latest move in its trade tensions with Brussels, after China launched an anti-dumping probe on pork imports from the European Union. That comes as the bloc looks at Chinese subsidies across a range of industries and will impose tariffs on electric car imports from July.
In commodities, oil held the biggest advance in a week as risk-on sentiment in wider markets overshadowed a mixed outlook for crude. Gold was little changed.