SINGAPORE- Asian stocks rose sharply on Wednesday led by tech stocks as investors’ focus shifts to earnings from US tech bellwethers this week, while the yen remained mired near 34-year lows, keeping traders wary of intervention from Japanese authorities.
An after-hours surge in shares of EV maker Tesla following its promise of new models, and upbeat earnings from some US companies lifted sentiment, spurring a rally in tech stocks across Asia with Taiwan South Korean and Japan’s Nikkei leading the charge.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.6 percent higher, having climbed 1 percent on Tuesday, as stocks rebounded from last week’s steep selloff.
China stocks were mixed, with the blue-chip index flat, while Hong Kong’s Hang Seng Index added 2 percent .
The risk-on rally is set to continue in Europe, with Eurostoxx 50 futures up 0.40 percent , German DAX futures up 0.33 percent and FTSE futures 0.60 percent higher.
Tesla kicked off the earnings season for US tech megacaps, announcing the launch of new electric vehicle models that sent its shares up 12.5 percent in extended trading. The gains came despite Tesla releasing first-quarter results that missed expectations.
US stocks closed higher as companies such as automaker General Motors reported strong earnings. E-mini futures for the S&P 500 rose 0.38 percent , while Nasdaq futures was 0.7 percent higher.
The earnings-packed week includes results from tech giants Meta Platforms Alphabet and Microsoft and will likely set the tone for the near term.
“Expectations are also set for upcoming earnings from major US tech companies like Meta, potentially maintaining a positive atmosphere in the tech sector ahead of these releases,” said Anderson Alves, a trader with ActivTrades.
Beyond corporate earnings, traders are also focused on US gross domestic product figures and the March personal consumption expenditure data – the Fed’s preferred inflation gauge – due later this week to gauge the path of US rates.
Markets are now pricing in September for the timing of the Federal Reserve’s first rate cut, with expectations of 42 basis points of cuts this year. At the start of the year, traders had priced in 150 bps of easing for the whole year.
