Hang Seng Index: AI Stock Surge Lifts Market as Alibaba Jumps 7.44%

US Markets Struggle as Powell Reinforces Wait-and-See Stance

US equity markets delivered mixed results on February 11. The Dow and S&P 500 posted gains of 0.28% and 0.03%, respectively, while the Nasdaq Composite Index fell 0.36%. Fed Chair Powell’s testimony on Capitol Hill and US tariff developments influenced risk sentiment.

Powell reinforced the Fed’s cautious policy approach, reiterating that there was no rush to cut rates, which weighed on risk assets. US tariff developments pressured risk sentiment as President Trump signed executive orders introducing 25% tariffs on aluminum and steel imports. US plans for reciprocal tariffs targeting nations that levy duties on US goods added to the market uncertainty.

However, AI-related developments remained a bright spot. Apple Inc. (AAPL) gained 2.18% after news of a partnership with Alibaba (BABA) to advance AI capabilities for iPhone users in China.

Hang Seng Index Rallies on AI Optimism

Turning to the Asian equity markets, the Hang Seng Index rallied 2.02% on Wednesday morning. AI-related enthusiasm helped offset market concerns about US reciprocal tariffs, driving demand for tech stocks.

The Hang Seng Technology Index jumped 2.30%, with tech giant Alibaba (9888) soaring 7.44% on the news of its AI collaboration with Apple. Tencent (0700) gained 2.58%, adding to the sector’s upswing.

Brian Tycangco, editor and analyst at Stansberry Research, highlighted the growing euphoria in the AI space:

“While we’re almost all talking about DeepSeek and AI advancements coming out of China, other Chinese tech firms are coming out with some pretty amazing stuff.”

However, it was a mixed morning for China’s Mainland equity markets amid lingering tariff uncertainty. The CSI 300 slipped by 0.03%, while the Shanghai Composite Index rose 0.11%.

Nikkei Index Reopens Higher on Yen Weakness

Japan’s Nikkei Index advanced by 0.16% on Wednesday morning. The USD/JPY pair rallied 0.72% to 153.559, adding to Tuesday’s 0.31% gain, boosting demand for Japanese stocks.

Tech stocks led the gains, with Softbank Group (9984) rising 2.15% ahead of its earnings release. However, tariff uncertainty weighed on export-linked stocks. Nissan Motor Corp. (7201) and Sony Corp. (6758) fell 6.80% and 1.98%, respectively, capping the Nikkei’s gains.

ASX 200 Advances on Upbeat Bank Earnings

Australia’s ASX 200 Index rose 0.33% on Wednesday morning, brushing aside tariff developments. Banking stocks led the gains.

The Commonwealth Bank of Australia (CBA) rallied 1.75% to a record high of A$165.37 after beating profit estimates, supported by a sizeable fall in loan impairment charges. National Australia Bank (NAB) and Westpac Banking Corp. (WBC) advanced by 1.36% and 1.26%, respectively.

However, an overnight 1.70% slide in iron ore spot prices weighed on mining stocks. BHP Group Ltd. (BHP) and Rio Tinto Ltd. (RIO) were down 0.19% and 1.01%, respectively.

Outlook: Risks and Opportunities Ahead

Looking forward, US-China trade developments and the AI boom will continue to drive market sentiment. AI stocks could extend their upward trajectory as competition intensifies and new partnerships emerge. However, tariff-fueled volatility may impact manufacturing and mining stocks.

Optimism about US-China trade talks may lift Australian, Hong Kong, and Mainland Chinese markets. The Hang Seng Index could continue benefiting from AI-driven momentum. Nevertheless, Asian markets remain vulnerable to further tariff shocks, underscoring the need for caution.

For key trading strategies and deeper insights into market trends, click here.