Asian shares mostly gained on Tuesday, driven by a strong rally in U.S. stocks that saw technology companies push benchmarks to new records. With U.S. futures flat and oil prices declining, the momentum from Wall Street provided a positive backdrop for Asian markets.
Tokyo’s Nikkei 225 led the gains, rising 0.9% to close at 38,441.90. The uptick was supported by Toyota Motor Corp., a market heavyweight, which saw its shares increase by 0.6%. This came after the automaker’s shareholders rejected a proposal to force chairman Akio Toyoda, grandson of the company’s founder, to step down. The resilience in Toyota’s leadership seemed to instill confidence among investors.
However, the mood wasn’t universally positive across Asia. Hong Kong’s Hang Seng index shed 0.2%, closing at 17,903.06. The market appeared cautious amidst ongoing geopolitical tensions and economic uncertainties. Conversely, the Shanghai Composite index edged up 0.4% to 3,026.61, reflecting modest optimism about the Chinese economy.
In South Korea, the Kospi gained 0.8%, ending at 2,766.22. Market sentiment was buoyed by strong performance in the tech sector. Sydney’s S&P/ASX 200 jumped 1% to 7,776.20 after the Reserve Bank of Australia decided to keep its key interest rate unchanged. Despite inflationary pressures described as persistent by the bank, the decision to hold rates steady was seen as supportive for economic growth. Analysts noted that while the bank acknowledged slow GDP growth, rising unemployment, and sluggish wage growth, the steady rate provided a level of predictability welcomed by the markets.
India’s Sensex also climbed 0.4%, reaching 77,291.77, adding to the positive tone in the region.
Meanwhile, in the U.S., stocks continued to climb to new heights. The S&P 500 rose 0.8% to a record 5,473.23, driven by strong performances in the technology sector. The Dow Jones Industrial Average gained 0.5%, closing at 38,778.10, while the Nasdaq Composite surged 1% to 17,857.02.
Among the notable movers, Autodesk jumped 6.5% after an investment firm announced plans to delay the software company’s annual meeting to nominate new directors for the board. Broadcom also saw significant gains, rising 5.4%. The chipmaker, which has been a key player in the artificial intelligence technology boom, recently reported better-than-expected profits and announced a 10-for-one stock split to make its shares more affordable. This move mirrored a similar action by Nvidia, further fueling investor enthusiasm.
Tech giants Apple and Microsoft also contributed to the market’s upward momentum, with gains of 2% and 1.2% respectively. Super Micro Computer, a company specializing in server and storage systems for AI, saw its stock leap 5.1%, bringing its year-to-date gain to an impressive 212.2%.
The bond market, however, saw rising yields. The 10-year Treasury yield increased to 4.28% from 4.22%, and the 2-year Treasury yield rose to 4.76% from 4.71%. This rise in yields reflects investor expectations that the Federal Reserve will maintain high interest rates to combat inflation. However, there is hope that rates might be cut later in the year.
The utilities sector in the S&P 500 fell 1.1%, the largest loss among the 11 sectors, as rising bond yields made income-seeking investors turn away from dividend-paying utility stocks. GameStop experienced a 12.1% drop following its annual shareholder meeting, where CEO Ryan Cohen announced a focus on cutting costs and reducing the number of stores.
In commodity markets, U.S. crude oil prices fell by 17 cents to $80.19 per barrel, while Brent crude dropped 30 cents to $84.19 per barrel. The dollar strengthened against the yen, rising to 157.59 yen from 156.38 yen, and the euro traded at $1.0724, up from $1.0702.
With few top-tier economic reports expected this week, the market’s attention will be on updates on U.S. retail spending and a preliminary look at business activity. U.S. markets will be closed on Wednesday in observance of the Juneteenth holiday.
