Investing.com-- Most Asian stocks rose on Tuesday as heavyweight technology stocks rebounded from a recent rout, although Chinese markets lagged as sentiment towards the country showed little improvement.
Regional markets tracked a strong overnight session on Wall Street, which was supported chiefly by a rebound in heavyweight tech shares. Focus was squarely on upcoming quarterly earnings from tech majors Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA), due later in the day.
U.S. stock index futures drifted lower in Asian trade, as sentiment still remained weak amid uncertainty over the U.S. presidential elections.
Tech supports Asian stocks, but barely
Japan’s Nikkei 225 index rose 0.2%, while the broader TOPIX added 0.5% on strength in technology stocks. Regional chipmaking stocks in particular tracked a rebound in artificial intelligence major NVIDIA Corporation (NASDAQ:NVDA).
Taiwan shares of TSMC (TW:2330) (NYSE:TSM), the world’s biggest contract chipmaker, surged 2.7% after losing nearly 7% in the past five sessions. Shares of the firm had taken little support from positive second-quarter earnings.
South Korea’s KOSPI added 0.3%. Producer price index inflation data showed factory inflation grew slightly in June.
But while tech-heavy indexes saw some relief on Tuesday, they were still nursing steep declines over the past week, as bets on interest rate cuts saw investors rotate into sectors more likely to benefit from an economic recovery.
Asian stocks were also battered by weak risk appetite amid increased uncertainty over the U.S. presidential race, after President Joe Biden dropped out and endorsed Vice President Kamala Harris as the Democratic presidential nominee.
Republican nominee Donald Trump said Harris will be easier to defeat. He was also seen polling ahead of Biden and Harris according to CBS and HarrisX data, although this was prior to Biden’s pulling out.
A rotation into economically sensitive sectors still remained in play on Tuesday. Australia’s ASX 200 added 0.7% on gains in heavyweight banks and mining stocks.
Futures for India’s Nifty 50 index pointed to a mildly positive open, as a weak rupee and optimism over the Indian economy kept the index and the BSE Sensex 30 near record highs.
The Indian government is also set to present its budget for 2024 later in the day, which may spark some volatility in local markets.
Chinese stocks lag as economic uncertainty, Trump fears persist
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.8% and 0.5%, respectively, while the tech-heavy Hang Seng index shed 0.3%.
Sentiment towards China showed little signs of improving despite a surprise interest rate cut by the People’s Bank of China on Monday, with analysts stating that the cut was too small to make too much difference.
The Third Plenum of the Chinese Communist Party largely underwhelmed investors, as Beijing unveiled few details on plans for more stimulus.
But a main point of weight on Chinese markets was speculation over a Trump presidency. Trump has maintained a largely hardline stance against China, and could impose more trade restrictions, drawing ire from Beijing.