Asia report: Tech shares in focus after Nasdaq's overnight rally

(Sharecast News) - Asia-Pacific markets showed mixed performances on Tuesday, buoyed by a strong rally in technology shares on Wall Street overnight. Japan led the region's gains, while Hong Kong and South Korea posted declines.

Stephen Innes, managing partner at SPI Asset Management, noted that Asian markets were riding a "buoyant wave" as they opened, spurred by an animating report hinting that US president-elect Donald Trump could dial back his "fiery tariff tantrum".

"While Trump quickly denounced the Washington Post's narrative around a more measured approach to tariffs as mere speculation, the market couldn't help but wonder if substance was behind the smoke," he said.

"This glimmer of hope has nurtured a growing belief among investors and top executives worldwide, who are now clinging to the prospect of a 'negotiator in chief' rather than the feared 'tariff man'.

"This shift in sentiment has slightly eased the fervent scramble for dollars that marked the lead-up to the inauguration."

Markets mixed, technology shares in focus across the region

In Japan, the Nikkei 225 surged 1.97% to close at 40,083.30, its highest level in months, driven by robust performances in technology and semiconductor stocks.

Tokyo Electron soared 11.25%, Kyocera Corporation rose 8.05%, and Renesas Electronics gained 7%.

The broader Topix also advanced by 1.1% to 2,786.57.

China's markets recorded moderate gains, with the Shanghai Composite rising 0.71% to 3,229.64 and the Shenzhen Component climbing 1.14% to 9,998.76.

Technology shares were also the standout performers in Shanghai, with Anhui Tongfeng Electronics, Tellhow Sci-Tech, and Cashway Technology each hitting their 10% daily limit.

In contrast, Hong Kong's Hang Seng Index fell 1.22% to 19,447.58, weighed down by losses in major tech stocks.

Tencent Holdings plummeted 7.28%, Xiaomi Corporation slid 5.92%, and Sinopharm Group dropped 3.09%.

South Korea's Kospi 100 slipped 0.26% to 2,496.68, as declines in gaming and industrial shares pressured the index.

Krafton lost 4.47%, Doosan Bobcat fell 4.15%, and DB Insurance declined 3.18%.

Australia's S&P/ASX 200 gained 0.34% to 8,285.10, supported by strong performances in the consumer and tech sectors.

Nine Entertainment rose 5.58%, NUIX added 5.44%, and Temple & Webster Group climbed 5.11%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 edged down 0.24% to 13,042.06, with utility stocks underperforming.

Genesis Energy fell 3.07%, Meridian Energy declined 3%, and Vector lost 2.49%.

In currency markets, the dollar was last down 0.03% on the yen, trading at JPY 157.58, as it slid 0.61% against the Aussie to AUD 1.5913, and retreated 0.77% from the Kiwi, changing hands at NZD 1.7585.

Oil prices were little changed, with Brent crude futures last up 0.09% on ICE to $76.37 per barrel, and the NYMEX quote for West Texas Intermediate dipping 0.14% to $73.46.

"Brent crude oil hovered at $76.30 per barrel on Tuesday, cooling off after five days of gains in what looks like a technical breather," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

"Weak economic data from the US and Germany outweighed bullish signals like higher energy demand, a weaker dollar, and Saudi Arabia hiking prices for Asian buyers.

"With oversupply fears and demand jitters lingering, the market seems stuck in a balancing act, while traders keep an ear to the ground for geopolitical twists that could stir things up."

Markets celebrate reports of Trump tariff plans, though concerns linger

There was a dearth of economic data releases in the Asia-Pacific region on Tuesday, with attention turning across the Pacific to US president-elect Donald Trump.

Reports overnight suggested Trump was reconsidering his broad tariff strategy, focusing instead on imposing targeted duties on critical sectors rather than applying sweeping tariffs on all imports.

According to a report by the Washington Post, Trump's team was discussing plans to narrow the scope of tariffs to industries deemed vital to national or economic security.

While the discussions apparently remained preliminary, they could mark a significant shift from the comprehensive trade measures Trump touted during his campaign.

A narrower focus on tariffs could mitigate fears of widespread disruptions to export-dependent economies in the Asia region, although concerns remained for industries that could fall under the proposed sector-specific measures, such as technology and manufacturing.

Reporting by Josh White for Sharecast.com.