The Hang Seng Index ended a two-week losing streak with a weekly gain of 2.73%. Hopes for a less aggressive Fed rate policy and China’s economic recovery boosted demand for Hong Kong and mainland Chinese stocks.
The interest rate-sensitive technology sector led the gains, with the Hang Seng Tech Index rising 5.13%. Technology giant Tencent (0700) gained 2.30%, while Baidu (9888) and Alibaba (9988) also posted gains.
Improved housing sector figures also boosted real estate shares. China’s house price index fell 5.3% year-on-year in December, a smaller decline than November’s 5.7% decline. The Hang Seng Mainland Properties Index gained 3.73%.
Mainland Chinese stock markets also ended the week on a positive note. The CSI 300 and Shanghai Composite posted gains of 2.14% and 2.31%, respectively.
Commodities are rising thanks to Chinese figures and Russian sanctions
Commodities had a positive week ending January 17. Chinese economic data boosted sentiment in iron ore demand. The iron ore market rose 4.61% this week. Gold ended the week 0.52% higher at $2,702. Expectations that Trump’s policies would fuel inflation boosted demand for gold as an inflation hedge.
Meanwhile, crude rose sharply on news of US sanctions on Russia’s energy trade.
ASX 200 trades higher on commodity gains
Australia’s ASX 200 rose 0.20% in the week ending January 17. Commodity price increases boosted demand for gold, oil and mining-related stocks. However, banking and technology-related stocks limited upside potential.
Northern Star Resources Ltd. (NST) rose 5.31% on rising gold prices. Fortescue Metals Group (FMG) and BHP Group Ltd. (BHP) rose 7.19% and 0.93% respectively on higher iron ore prices.
Meanwhile, the S&P/ASX 200 All Technology Index fell 2.09% this week, with banking shares also posting losses.
Nikkei index stumbles over BoJ rate hikes
In the week ending January 17, the Nikkei index fell 2.19%, bucking the broader market trend. Rising bets on a Bank of Japan (BoJ) rate hike in January sent the USD/JPY pair down 0.91%. The stronger yen weighed on Japanese export-related stocks. A stronger yen could weaken the profits and valuations of export-oriented companies.
Notable gainers included Tokyo Electron (8035) and Softbank Group (9984), which fell 1.37% and 1.85% respectively. Nissan Motor Corp. (7201) plummeted 6.31%.
Outlook: policy and geopolitics in focus
With policy decisions on the horizon, markets remain primed for increased volatility; stay ahead.
Key developments this week include Trump’s inauguration, the Bank of Japan’s monetary policy decision and future central bank guidance. Rising geopolitical tensions and hawkish central bank comments could weigh on sentiment, while targeted Chinese stimulus and an easing of US private sector activity could signal a dovish Fed.
Traders must keep a close eye on economic trends to navigate the changing dynamics. Click here for more analysis of the Hang Seng Index and global market trends.