Asian Stocks Surge as Tech Tracks Wall Street Rally, China Slips By Investing.com

By Ambar Warrick 

Investing.com– Most Asian stock markets rose sharply on Tuesday, with technology-heavy bourses mirroring an overnight rally on Wall Street, while Chinese equities slipped as investors curbed their expectations for the lifting of COVID restrictions in the country. 

Japan’s index jumped 1.3%, while the added 0.7%. South Korea’s index also rose nearly 1%, while India’s blue-chip index added 0.5%. 

surged overnight, with technology stocks rising the most on speculation over the Federal Reserve potentially slowing its pace of interest rate hikes. The retreated from recent gains after several Fed members said they support smaller interest rate hikes going forward.

Such a scenario would be positive for Asian markets in the near-term, although given that the Fed signaled that interest rates will likely peak at higher levels than expected, regional bourses are still expected to remain under pressure.

Focus this week is on the U.S. midterm elections, which could potentially herald changes in the country’s economic policies. Traders will also be watching U.S. , which could potentially factor into the Fed’s stance on monetary policy. 

On the other hand, Chinese stocks on Tuesday, amid waning hopes that the government will lift COVID restrictions in the near-term. Health officials recently denied that the country plans to scale back the strict zero-COVID policy. 

The blue-chip index fell 1.2%, while the index fell 0.9%. Hong Kong stocks were also sold off in tandem with their Chinese counterparts. The shed 0.8%, although losses were tempered by heavyweight technology stocks. 

Chinese markets, which weakened substantially this year on economic ructions caused by the zero-COVID policy, rallied sharply last week on rumors over its potential removal. 

While reports suggested that the government was considering the scaling back of COVID lockdowns due to general discontent and an economic slowdown, there is no set timeline or measures outlined over such a move.

China is also grappling with its worst COVID outbreak since May, which saw the imposition of new restrictions in several cities, including financial capital Shanghai. 

Australia’s somewhat lagged its peers, rising only 0.4% after data showed worsened substantially in early November.

Major Australian mining stocks also retreated on concerns over slowing growth in China, given their dependence on the country as a market.