Asia report: Hang Seng surges on mixed day for region
By Josh White
Date: Wednesday 26 Feb 2025
(Sharecast News) - Asia-Pacific markets saw mixed performances on Wednesday, as Hong Kong's Hang Seng Index surged after the city pledged to become an artificial intelligence hub.
Meanwhile, Wall Street's overnight decline weighed on investor sentiment, following a weaker-than-expected US consumer confidence reading on Tuesday.
Stephen Innes, managing partner at SPI Asset Management, quipped that the "perfect storm" was brewing.
"A string of data misses, escalating trade tensions, and violent asset price swings has traders questioning just how solid the US economic foundation really is.
"Enter Treasury Secretary Scott Bessent - one of the sharpest portfolio managers out there - who just waved the red flag, warning that the economy is far more 'brittle# than headline numbers suggest. Yikes.
"If he's right, Asian and EM markets are about to get thrown into the spin cycle."
Innes noted that when the US sneezes, global markets don't just catch a cold - they get the "full-blown bear flu".
"The early signs? MSCI's Asia ex-Japan and EM indexes, along with Chinese and Japanese benchmarks, all dropped over 1% on Tuesday.
"That's a broad-based risk-off flush."
Markets mixed, Hong Kong surges after budget announcement
Hong Kong's Hang Seng Index rose 3.27% to 23,787.93, leading regional gains.
The city's budget announcement allocated HKD 1bn (£101.71bn) to AI research and development, boosting the technology and consumer sectors.
Longfor Properties jumped 10.67%, Budweiser Brewing Company gained 10.46%, and Meituan advanced 9.84%.
Mainland China's markets also posted solid gains, with the Shanghai Composite climbing 1.02% to 3,380.21 and the Shenzhen Component rising 0.93% to 10,955.65.
Kangxin New Materials led the Shanghai rally with a 10.24% increase, followed closely by Routon Electronic and Xinyu Iron & Steel, both up more than 10%.
Japan's Nikkei 225 fell 0.25% to 38,142.37, weighed down by losses in the technology sector.
M3 dropped 5.3%, Tokyo Electron fell 5.19%, and Resona Holdings declined 4.26%.
The broader Topix index slipped 0.3% to 2,716.40.
South Korea's Kospi 100 rose 0.47% to 2,629.81, supported by gains in financial technology and materials stocks.
Kumyang surged 17.16%, while KakaoPay and SK IE Technology gained 9.61% and 8.91%, respectively.
Australia's S&P/ASX 200 dipped 0.14% to 8,240.70, with weakness in travel and mining stocks.
Flight Centre Travel Group plunged 10.16%, Fortescue fell 6.23%, and Champion Iron lost 5.42%.
New Zealand's S&P/NZX 50 outperformed with a 1.18% gain, closing at 12,452.46.
Investore Property led with a 9.9% increase, while Serko rose 5.22% and Vector advanced 4.8%.
In currency markets, the dollar was last up 0.22% on the yen, trading at JPY 149.36, while it gained 0.36% against the Aussie to AUD 1.5820, and advanced 0.41% on the Kiwi, changing hands at NZD 1.7537.
Oil prices remained steady, with Brent crude futures last down 0.04% on ICE to $72.99 per barrel, while the NYMEX quote for West Texas Intermediate rose 0.1% to $69.00.
Consumer inflation remains steady in Australia
In economic news, Australia's annual inflation rate remained at 2.5% in January, according to fresh data from the Australian Bureau of Statistics.
The figure matched December's pace and aligned with market expectations.
Rising costs in food and beverages, housing, and alcohol and tobacco drove inflation higher, though a decline in electricity prices provided some relief.
The steady inflation reading followed the Reserve Bank of Australia's decision last week to lower its benchmark interest rate by 25 basis points to 4.1%, marking its first rate cut in over four years as policymakers shifted focus toward supporting economic growth.
Reporting by Josh White for Sharecast.com.
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