AI Optimism Boosts Chinese Tech Stocks, While Global Markets Navigate Economic and Political Uncertainties

Asia shares get China boost, gold heads for eighth straight weekly gain

SINGAPORE (Reuters) - Asian shares rose on Friday, reversing Wall Street's negative lead as the U.S. exceptionalism narrative continued to lose its shine, while once unloved Chinese stocks found themselves more buyers thanks to optimism over artificial intelligence (AI). Gold hovered near a record high and was set to extend its gains for an eighth consecutive week, helped by safe-haven flows due to concerns over Donald Trump's tariff threats and amid contentious talks as the U.S. President pushes for a quick deal to end the Russia-Ukraine war. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8% in the early Asian session, boosted by a jump in Hong Kong-listed stocks. Hong Kong's Hang Seng Index advanced 1.8% shortly after the open, while tech shares surged 2.5%. [.SS] Similarly, China's CSI300 blue-chip index gained 0.2%, with the CSI big data index rising 2%. Chinese stocks have been on a tear in recent days, driven by DeepSeek's AI breakthrough that reignited investor interest in China's technology capabilities. While the Hang Seng Tech Index has gained 26% for the year thus far, the S&P 500 is up just 4% over the same period. "DeepSeek has been a catalyst for sentiment changing," said Brian Arcese, portfolio manager at Foord Asset Management. Earlier this week, Chinese President Xi Jinping held a rare meeting with some of the biggest names in China's technology sector, urging them to "show their talent" and be confident in the power of China's model and market. "I think that is a shift in China. These things are done for a reason, nothing's really coming out of the meeting other than the fact that we're showing that we've met... but that is a big signal, you don't do that lightly," said Arcese. Elsewhere, Nasdaq futures ticked 0.02% higher while S&P 500 futures fell 0.03%, both struggling to recoup Wall Street's losses from the previous session. [.N] Thursday's downbeat forecast from Walmart, the world's largest retailer, dampened investor sentiment and stoked concerns about the outlook for the world's largest economy. "The Walmart report, it's such a bellwether for the U.S. economy, and usually probably in isolation you could look through it ... but following the weak retail sales data, suddenly there's some concerns out there," said Tony Sycamore, a market analyst at IG. EUROSTOXX 50 futures were down 0.05%, while FTSE futures lost 0.08%. Japan's Nikkei edged up 0.05%, with its gains capped by a stronger yen. [.T] DOLLAR EASES While the threat of further import duties from Trump continued to cast a pall over markets, traders are also sobering up to the fact that the start of his second term has been mostly bluster on the tariff front. The dollar was headed for a third straight weekly loss, as bulls who had built up big long positions in anticipation of a trade war have backed off while Trump equivocates about tariffs. Several Federal Reserve officials on Thursday said they are taking note of what they see as rising inflation risks and the uncertain impact of Trump's trade, immigration and other policies. The weaker dollar left sterling at a two-month high of $1.2674, while the euro steadied at $1.0490 ahead of a weekend election in Germany. The yen, meanwhile, fell more than 0.4% to 150.28 per dollar, after having jumped on Thursday on heightened bets of further Bank of Japan (BOJ) rate hikes this year. Data on Friday showed Japan's core consumer inflation hit 3.2% in January, its fastest pace in 19 months. "The data supports the growing market conviction of a BOJ rate hike by July, and a possible third hike by year-end," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. U.S. Treasury yields steadied on Friday, after falling in the previous session following comments from Treasury Secretary Scott Bessent who said any move to increase the share of longer-term Treasuries in government debt issuance is some way off. The two-year yield was last little changed at 4.2635%, while the benchmark 10-year yield stood at 4.4975%. [US/] In commodities, oil prices dipped but were headed for a weekly gain. [O/R] Brent crude oil futures eased 0.1% to $76.40 a barrel, but were set to rise more than 2% for the week. U.S. West Texas Intermediate crude eased 0.07% to $72.43, but was also on track for a weekly gain of over 2%.

Asia shares get China boost, gold heads for eighth straight weekly gain

SINGAPORE, Feb 21 (Reuters) - Asian shares rose on Friday, reversing Wall Street's negative lead as the U.S. exceptionalism narrative continued to lose its shine, while once unloved Chinese stocks found themselves more buyers thanks to optimism over artificial intelligence (AI). Gold hovered near a record high and was set to extend its gains for an eighth consecutive week, helped by safe-haven flows due to concerns over Donald Trump's tariff threats and amid contentious talks as the U.S. President pushes for a quick deal to end the Russia-Ukraine war. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab rose 0.8% in the early Asian session, boosted by a jump in Hong Kong-listed stocks. Hong Kong's Hang Seng Index (.HSI), opens new tab advanced 1.8% shortly after the open, while tech shares (.HSTECH), opens new tab surged 2.5%. Similarly, China's CSI300 blue-chip index (.CSI300), opens new tab gained 0.2%, with the CSI big data index (.CSI930902), opens new tab rising 2%. Chinese stocks have been on a tear in recent days, driven by DeepSeek's AI breakthrough that reignited investor interest in China's technology capabilities. While the Hang Seng Tech Index has gained 26% for the year thus far, the S&P 500 (.SPX), opens new tab is up just 4% over the same period. "DeepSeek has been a catalyst for sentiment changing," said Brian Arcese, portfolio manager at Foord Asset Management. Earlier this week, Chinese President Xi Jinping held a rare meeting with some of the biggest names in China's technology sector, urging them to "show their talent" and be confident in the power of China's model and market. "I think that is a shift in China. These things are done for a reason, nothing's really coming out of the meeting other than the fact that we're showing that we've met... but that is a big signal, you don't do that lightly," said Arcese. Elsewhere, Nasdaq futures ticked 0.02% higher while S&P 500 futures fell 0.03%, both struggling to recoup Wall Street's losses from the previous session. Thursday's downbeat forecast from Walmart (WMT.N), opens new tab, the world's largest retailer, dampened investor sentiment and stoked concerns about the outlook for the world's largest economy. "The Walmart report, it's such a bellwether for the U.S. economy, and usually probably in isolation you could look through it ... but following the weak retail sales data, suddenly there's some concerns out there," said Tony Sycamore, a market analyst at IG. EUROSTOXX 50 futures were down 0.05%, while FTSE futures lost 0.08%. Japan's Nikkei (.N225), opens new tab edged up 0.05%, with its gains capped by a stronger yen. DOLLAR EASES While the threat of further import duties from Trump continued to cast a pall over markets, traders are also sobering up to the fact that the start of his second term has been mostly bluster on the tariff front. The dollar was headed for a third straight weekly loss, as bulls who had built up big long positions in anticipation of a trade war have backed off while Trump equivocates about tariffs. Several Federal Reserve officials on Thursday said they are taking note of what they see as rising inflation risks and the uncertain impact of Trump's trade, immigration and other policies. The weaker dollar left sterling at a two-month high of $1.2674, while the euro steadied at $1.0490 ahead of a weekend election in Germany. The yen , meanwhile, fell more than 0.4% to 150.28 per dollar, after having jumped on Thursday on heightened bets of further Bank of Japan (BOJ) rate hikes this year. Data on Friday showed Japan's core consumer inflation hit 3.2% in January, its fastest pace in 19 months. "The data supports the growing market conviction of a BOJ rate hike by July, and a possible third hike by year-end," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets. U.S. Treasury yields steadied on Friday, after falling in the previous session following comments from Treasury Secretary Scott Bessent who said any move to increase the share of longer-term Treasuries in government debt issuance is some way off. The two-year yield was last little changed at 4.2635%, while the benchmark 10-year yield stood at 4.4975%. In commodities, oil prices dipped but were headed for a weekly gain. Brent crude oil futures eased 0.1% to $76.40 a barrel, but were set to rise more than 2% for the week. U.S. West Texas Intermediate crude eased 0.07% to $72.43, but was also on track for a weekly gain of over 2%. Reporting by Rae Wee; Editing by Kim Coghill Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Markets

Chinese and European shares rise, data, politics and geopolitics all in focus

SINGAPORE/LONDON (Reuters) - European shares rose on Friday, following peers in Asia, which hit a three-month high on AI optimism, though gains were tempered by uncertainty over developments in Ukraine and the upcoming German elections. Europe's broad Stoxx 600 nudged up 0.2%, reversing two days of declines and pushing back towards a record high hit earlier in the week. Germany is one major focus in Europe, and shares have been volatile this week as investors try to position ahead of Sunday's election. Their main question is whether it will result in a government and parliament willing or able to reform the country's "debt brake", which limits Germany's structural deficit. The blue-chip DAX, one of 2025's best-performing benchmarks so far, was flat around 2.5% below Wednesday's record peak. Domestic-focused German mid caps were up 0.8% on Friday, having hit a seven-month high early this week before falling sharply. "With DAX up 13% year-to-date, it may see some downside if the status quo prevails and smaller parties secure a blocking minority," said analysts at Barclays. In contrast, if a more pro-reform parliament is elected, they see potential for both mid and large caps to gain. More spending would likely boost the euro, and weigh on government bonds. Investors are also trying to process the implications of negotiations between the U.S. and Russia over a possible ceasefire in Ukraine. Shares in Europe had been rising on hopes of peace, but have recently stalled, and hostile rhetoric from U.S. President Donald Trump toward Ukraine has left investors in its bonds in shock. There was economic data out too. Business activity in Germany's private sector picked up slightly in February, but contracted by much more than expected in France. British retail sales rose in January. Overall, this left the euro lower against both the pound and the dollar at $1.1047 and 82.76 pence. [FRX/] There was plenty happening in Asia too, and MSCI's broadest index of Asia-Pacific shares outside Japan jumped more than 1% to its highest since November 8 on Friday, putting the index on track for a sixth straight week of gains - the longest such winning streak in over two years. The move was led by a surge in Hong Kong- and China-listed stocks, which saw the Hang Seng Index scale a three-year peak and push the CSI300 index 1% higher.[.SS] Alibaba, up 12.7% after it reported better-than-expected revenue, was the day's poster child, but Chinese stocks have been on a tear in recent days, driven by DeepSeek's AI breakthrough that reignited investor interest in China's technology capabilities. The Hang Seng Tech Index has gained nearly 30% for the year thus far, the S&P 500 is up just 4% over the same period. "DeepSeek has been a catalyst for sentiment changing," said Brian Arcese, portfolio manager at Foord Asset Management. Also in the mix, earlier this week, Chinese President Xi Jinping held a rare meeting with some of the biggest names in China's technology sector, urging them to "show their talent" and be confident in the power of China's model and market. The other mover in Asia was the Japanese yen, which took a breather after its recent rapid appreciation. The dollar was last up 0.5% on the yen at 150.4 after yen comments from Bank of Japan Governor Kazuo Ueda eased concerns that the central bank may be considering a more aggressive rate hike stance.[JP/] Those comments trumped data also Friday showing Japan's core consumer inflation hit 3.2% in January, its fastest pace in 19 months. In commodities, oil prices dipped but were headed for a weekly gain. [O/R] Brent crude oil futures eased 0.41% to $76.14 a barrel, but were set to rise more than 2% for the week. Gold hovered near a record high and was set to extend its gains for an eighth consecutive week. (Reporting by Rae Wee in Singapore and Alun John in London; Editing by Kim Coghill, Lincoln Feast and Sharon Singleton)