ASIA STOCKS: China & HK Equities Surge Higher, Led By Tech & Alibaba
Feb-21 04:25
Hong Kong and mainland China equity markets are posting strong gains, led by a robust rally in technology shares following Alibaba's stellar earnings report. The Hang Seng Index surged 2.9%, while the Hang Seng China Enterprises Index jumped 3%, and the Hang Seng Tech Index rallied more than 4.70%, driven primarily by Alibaba’s Hong Kong-listed shares, which opened 10% higher after reporting sales that exceeded expectations, particularly in its Taobao, Tmall, and cloud units, fueled by AI-driven demand.
- The CSI 300 Index on the mainland rose 1.2%, and the Shanghai Composite Index also advanced 0.80%, reflecting renewed optimism in Chinese tech stocks amid the DeepSeek AI rally and positive signals from President Xi Jinping’s supportive stance toward private firms, including Alibaba co-founder Jack Ma’s recent meeting with Xi.
- Alibaba’s Stellar Earnings and AI Momentum is dirving most of the gains today. Alibaba’s Q4 results, surpassing estimates with strong growth in e-commerce (Taobao, Tmall) and cloud revenue—driven by an “explosion” in AI inference demand—have significantly boosted investor sentiment. The company’s 10% surge in Hong Kong and 8.1% jump in ADRs, alongside positive analyst upgrades from Citi, JPMorgan, Goldman Sachs, and Bloomberg Intelligence, have reignited the DeepSeek-fueled AI rally, pushing the Hang Seng Tech Index into a bull market and attracting foreign long-only funds back to Chinese equities.
- However, not all stocks performed well, with Netease shares falling as much as 2.8% in Hong Kong after missing Q4 expectations, and Lenovo shares, despite a 4.9% rise after strong revenue driven by AI infrastructure demand, had dropped 6.4% the previous day.
- Overall, the markets are on track for a sixth consecutive weekly advance, with Hong Kong leading regional gains, though some volatility persists amid valuation concerns and broader economic uncertainties.
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GOLD: Gold’s Rally Continues as Tariffs for China Considered
Jan-22 04:25
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- Gold rallied throughout the the day to reach new highs for the year.
- Bullion opened at US2,708.21, rising throughout the trading day to $2,750.99.
- Gold typically likes either lower rates or a weaker USD and with Trump seemingly pulling back from tariffs on China for now, the USD was weaker against most Asian currencies.
- Gold also exhibits safe-haven status in times of volatility which no doubt will be in the days and weeks ahead as policies are announced.
- Trump has indicated that tariffs levelled at Mexico and Canada could come into place as early as February, and that he is considering a ‘universal tariff on all imports into the US’.
- The threat of tariffs, proposed increase in spending and trade wars sees investors having concern as to the pathway for inflation and hence interest rates.
- Whilst the geo-politics will have input into the short run impact for gold, the longer term direction for rates will be the most significant for gold.
- Some of the largest gold ETFs were up over 3% yesterday in what was one of the biggest moves year to date.
US TSY FLOWS: BLOCK: FV Likely Buyer
Jan-22 04:19
- +2,238 FVH5 at 106-05+, post time 15:07:25, DV01 $93k. Contract last trades -01¾ at 106-05+ just off session lows of 106-04+
EQUITIES: NASDAQ Futures Nearing YTD Highs, Following AI Focused Investment
Jan-22 04:16
- US equity futures continue to edge higher throughout the session, with the NASDAQ leading the way, last up 0.70% and is now testing the ytd highs made Jan 6th, S&P 500 Eminis are 0.30% higher, while Dow Jones Eminis are unchanged.
- Tech stocks are outperforming, due to the announcement from Trump around a $100b AI focused investment, with Asian semiconductor stocks also trading higher, the BBG Asia Semiconductor Index is 1.50% higher.
- Crypto is also likely leading to gains in tech stocks with Bitcoin holding at $106,000, near record highs, as the SEC launched a task force on crypto regulation under President Trump's administration, signaling a friendlier approach to the sector. The initiative, led by pro-crypto commissioner Hester Peirce, aims to provide regulatory clarity and boost innovation, while Trump plans to prioritize digital assets nationally.
