Asian Markets Rise as Investors Focus on US Monetary Policy and Tech Sector
Most Asian markets rose on Tuesday, following Wall Street’s record-breaking start to the year, as investors bet on artificial intelligence-linked tech stocks. The surge came despite concerns over the ouster of Venezuelan President Nicolas Maduro and the surprise US raid on Caracas. Oil prices steadied after initial volatility, while traders largely ignored the geopolitical developments.
The focus has shifted to US monetary policy, with key data releases this week expected to influence the Federal Reserve’s interest rate decision at the end of the month. Analysts remain optimistic about the outlook for equities, driven by the tech sector’s growth, particularly in artificial intelligence. According to Charu Chanana, chief investment strategist at Saxo Markets, “global equities are likely to keep looking through the geopolitical shock unless it threatens the broader supply chain or tightens financial conditions.”
On Wall Street, the Dow ended at a new record, boosted by tech giants such as Amazon and Meta, as well as energy companies. The S&P 500 and Nasdaq also rose, supported by data showing US manufacturing activity contracted for the 10th straight month in December, giving the Fed room to cut rates. The upcoming jobs data may further justify easing, despite the central bank’s suggestion of a potential pause.
In Asia, Hong Kong’s Hang Seng Index rose 1.5%, while Tokyo’s Nikkei 225 and Shanghai’s Composite also gained. Seoul’s market dipped after soaring over 3% on Monday, while Sydney’s market fell despite a 20% surge in Australia’s BlueScope Steel after a potential takeover bid. Oil prices slipped, with West Texas Intermediate down 0.5% at $58.01 per barrel and Brent North Sea Crude down 0.4% at $61.49 per barrel.
The developments in Venezuela have raised concerns about the global oil supply, but experts note that a quick ramp-up of output is unlikely due to the country’s infrastructure challenges, low prices, and political uncertainty. As investors continue to monitor the situation, the focus remains on the US monetary policy and the tech sector’s growth, which is expected to drive the markets in the coming weeks. With key data releases and the Federal Reserve’s meeting on the horizon, investors are poised to make informed decisions about their investments.
