Asian Stocks Fall, Hong Kong Tech Rally Pulls Back: Markets Wrap

(Bloomberg) -- Equities fell across Asia as concerns over a realignment of US geopolitical priorities weighed on risk sentiment. The yen strengthened.

A gauge of Asian shares dropped 0.8%, while an index of Chinese technology shares in Hong Kong slumped by more than 2% after rallying to a three-year high. Treasuries edged higher in Asian trading and gold held near a record high.

US President Donald Trump is increasing pressure on Ukraine to reach a peace deal with Russia, raising concerns among European allies that he will walk back years of support for the Eastern European nation. He also added to uncertainty over his tariff plans by talking about a potential 25% levy on lumber.

“Markets are getting nervous about the approach that President Trump is taking in resolving the Russia-Ukraine conflict and fearing an ugly turn here,” said Charu Chanana, the chief investment strategist at Saxo Markets. 

US equity index futures declined. The yen hit its strongest level against the dollar since December on growing speculation the Bank of Japan will hike rates sooner rather than later. The nation will report inflation data on Friday. 

The war in Ukraine continued to dominate markets in Europe as officials in the region fume after being excluded from US-Russia talks in Saudi Arabia. In an escalation of pressure, Trump called Ukraine President Volodymyr Zelenskiy a “dictator” on Wednesday, and urged him to move quickly for a deal. 

Bond traders are now waiting on details of potential new defense funding measures in Europe as the region debates the need to step up in light of Trump’s pivot. Last week, German Chancellor Olaf Scholz said the European Union is strong enough to counter any US tariff threats but that he hopes for a negotiated agreement that can avoid a trade war.

“We are in a very fractured world,” Ben Powell, chief APAC and Middle East investment strategist at BlackRock Investment Institute, said in a Bloomberg TV interview. 

Trump also said it would be possible to reach a fresh trade deal with China, signaling he is open to heading off a brewing trade fight between Washington and Beijing. The dollar fell against all of its Group-of-10 peers while the yuan advanced.

In Hong Kong, Alibaba Group Holding Ltd. shares declined as much as 4.6% as investors turn their focus to the company’s earnings presentation Thursday after a DeepSeek-sparked rally added more than $110 billion to its market value. Meituan Inc. shares dropped as much as 6.9% after the e-commerce company disclosed plans to expand social security protection to more workers.

Chinese technology shares have staged a bull run this year, driven by optimism over DeepSeek and President Xi Jinping’s meeting with major business leaders including Alibaba co-founder Jack Ma. That rally took a pause Thursday as some investors perceived the gains as overdone, though the fresh comments from Trump about a China trade deal helped ease jitters. 

Meanwhile, Fed minutes Wednesday showed policymakers in January expressed a readiness to hold interest rates steady amid stubborn inflation and economic-policy uncertainty. Officials also revealed pausing or slowing the balance-sheet runoff — a process known as quantitative tightening, or QT, until the government’s debt-ceiling drama is resolved. 

In commodities, oil prices steadied Thursday after gaining in the prior session against the backdrop of uncertainties about crude supplies from Russia, Kazakhstan and OPEC+.

Separately, Lenovo Group Ltd.’s quarterly profit beat projections, highlighting how AI infrastructure spending is helping pull the global PC market out of a years-long funk. Net income more than doubled to $692.7 million in the December quarter, compared with an average estimate of $365 million. 

Key events this week:

• Eurozone consumer confidence, Thursday
• US initial jobless claims, Philadelphia Fed manufacturing index, Thursday
• Fed’s Austan Goolsbee and Alberto Musalem speak, Thursday
• Eurozone HCOB manufacturing & services PMI, Friday
• US S&P Global manufacturing & services PMI, existing home sales, consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.3% as of 1:05 p.m. Tokyo time
• Japan’s Topix fell 1.6%
• Australia’s S&P/ASX 200 fell 1.4%
• Hong Kong’s Hang Seng fell 1.4%
• The Shanghai Composite fell 0.2%
• Euro Stoxx 50 futures rose 0.1%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro was little changed at $1.0429
• The Japanese yen rose 0.7% to 150.45 per dollar
• The offshore yuan rose 0.2% to 7.2699 per dollar

Cryptocurrencies

• Bitcoin rose 0.9% to $97,134.71
• Ether rose 1.2% to $2,742.16

Bonds

• The yield on 10-year Treasuries declined one basis point to 4.52%
• Australia’s 10-year yield advanced two basis points to 4.54%

Commodities

• West Texas Intermediate crude fell 0.5% to $71.89 a barrel
• Spot gold rose 0.2% to $2,940.71 an ounce

This story was produced with the assistance of Bloomberg Automation.

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