The Hang Seng Index extended its winning streak to five weekly gains, surging by 7.04%, its best week since October. Rising bets on a Fed rate cut and DeepSeek’s AI-fueled market enthusiasm fueled the rally.
The Hang Seng Technology Index rallied 7.30%, contributing to the weekly gains. Tech giants Alibaba Group Holdings Ltd. (9988) soared 24.10% in the week, while Tencent (0700) and Baidu (9888) gained 10.55% and 11.94%, respectively.
Mainland China’s equity markets also benefited from US tariff developments and China’s position in the global AI race. The CSI 300 and Shanghai Composite rose 1.19% and 1.30%, respectively. However, the gains were more modest, with the Mainland markets unaffected by sentiment toward Fed policy.
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Commodities: Gold Nears $3,000 Iron Ore Dips
Commodities had a mixed week ending February 14:
- Gold extended its winning streak to seven weeks, rising 0.79% to close at $2,883. Significantly, gold struck a new record high of $2,943 before easing back.
- Meanwhile, Iron ore spot prices slid 3.14% to $788.11 amid lingering concerns over US-China trade policies, despite a temporary reprieve from tariff delays.
- Crude oil prices fell amid higher US inventories, a potential end to the Ukraine war, and tit-for-tat US tariff threats.
ASX 200 Strikes New Record on Banking and Gold Stocks
The ASX 200 rose 0.52% for the week, climbing to a new record high, with banking, gold, and tech stocks leading the charge.
- Northern Star Resources (NST) jumped 4.68%, tracking gold prices higher.
- The Commonwealth Bank of Australia (CBA) rallied 1.70% after posting better-than-expected profits, driven by a sharp drop in loan impairment charges.
- Westpac Banking Corp. (WBC) ended the week up 1.97%, benefiting from lower US Treasury yields, which increased demand for high-yielding Aussie banks.
Nikkei Index Gains as Yen Weakens
The Nikkei Index ended the week 0.62% higher, supported by the USD/JPY pair advancing by 0.59% to 152.282. A weaker Japanese Yen may boost overseas earnings and corporate valuations. The Yen weakened against the US Dollar despite rising bets on a second H1 2025 Bank of Japan rate hike.
Japan’s producer prices rose 4.2% year-on-year in January, up from 3.9% in December, signaling stronger demand.
Corporate earnings contributed to the weekly gains. Sony Corp. (6758) jumped 6.37% after reporting impressive gaming and music division performance.
Market Outlook: Key Events to Watch
The coming week is pivotal for Asian markets, with US tariff policies, geopolitics, and economic data in focus.
- A potential de-escalation in the Ukraine war and easing trade war fears would boost risk sentiment.
- The RBA interest rate decision could influence the ASX 200, while fresh stimulus measures from Beijing could support the broader markets.
- In Japan, economic data will drive BoJ rate hike bets, potentially lifting the Yen and weighing on export-linked stocks.
Traders should monitor global economic trends to navigate shifting market dynamics.
