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Asian Stocks Surge on China Stimulus and Tech Optimism

Asian stocks experienced a surge on Monday, buoyed by favorable developments in China’s stimulus measures and a bullish sentiment in the technology sector ahead of key earnings reports.

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China’s Stimulus Boost:

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes continued their upward trajectory, rising 0.2% and 0.3% respectively, building on gains from the previous week.

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Beijing implemented various supportive measures for the economy, particularly targeting the property market, to bolster a sluggish economic recovery.

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Despite these positive moves, concerns lingered over China’s economic performance, with April’s retail spending and capital investment still displaying weakness, possibly necessitating further stimulus actions.

Tech Sector Advances:

Tech-heavy indexes showed strong performance, with Japan’s Nikkei 225 index climbing 1.3%, while South Korea’s KOSPI and Hong Kong’s Hang Seng increased by 0.6% and 0.4% respectively.

Investors showed confidence in the tech sector ahead of NVIDIA Corporation’s quarterly earnings report, slated for Wednesday. NVIDIA’s performance is closely watched as a gauge of demand in the AI industry, with the company leading a surge in tech valuations driven by AI advancements.

Last week’s optimism over declining U.S. interest rates, which pushed down Treasury yields, also contributed to the positive sentiment in the tech sector.

Broader Market Movement:

Australia’s ASX 200 witnessed a 0.6% rise, propelled by a rally in copper and other metal prices, particularly benefiting mining stocks.

Thailand’s SET Index also saw a 0.2% increase, supported by better-than-expected gross domestic product data for the first quarter, indicating stronger-than-anticipated economic growth.

Market Outlook:

Market attention remains focused on cues from the minutes of the Fed’s late-April meeting, along with speeches from several Fed officials scheduled for this week.

Lingering concerns about a potential trade war escalation between China and the U.S. could dampen market sentiment despite positive developments in China’s stimulus efforts.

Overall, the Asian stock market exhibited resilience and optimism, driven by China’s stimulus initiatives and the anticipation surrounding tech sector earnings, while keeping a watchful eye on global economic and geopolitical developments.

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