Asia Market News: ASX 200 Rides Tech Sector Wave on the NVIDIA Effect

China House Prices Fall Further

House prices in China fell by 0.7% in January year-over-year after falling by 0.4% in December. Investors responded positively to the January numbers that were in line with forecasts.

Recent PBoC policy moves to bolster the real estate market likely influenced investor reaction to the numbers. This week, the PBoC slashed the 5-year loan prime rate by 25 basis points to 3.95%, with Beijing keen to resuscitate the ailing real estate sector. The PBoC cut to 5-year mortgage rates could significantly influence sentiment toward the real estate sector.

However, the markets expect fiscal stimulus to reboot the broader Chinese economy. Fiscal stimulus could change the narrative, though demand remains a concern as certain economies enter technical recessions.

The AUD/USD responded to the numbers, climbing from $0.65649 to a Friday session high of $0.65740. However, risk-on sentiment contributed to the morning gains as the NVIDIA (NVDA) Effect fueled the appetite for riskier assets.

On Friday morning, the AUD/USD was up 0.24% to $0.65725.

The NVIDIA Effect Fuels ASX 200 Gains

On Friday, the S&P ASX All Technology Index (XTX) was up 1.41%. Investors reacted further to NVIDIA (NVDA) earnings from Wednesday. On Thursday, NVDA surged 16.40%, with the Nasdaq Composite Index and S&P 500 rallying 2.96% and 2.11%, respectively. The ASX 200 was up 0.42% midway through the Friday session.

However, the Hang Seng Index failed to leverage from the overnight gains across the US equity markets.

The Hang Seng Index was down 0.37% in the morning session, giving up early gains. The Hang Seng TECH Index contributed to the morning losses, falling 1.24%. However, the real estate sector limited the downside. The Hang Seng Mainland Properties Index was up 0.33% following mainland house price figures for January.

Other News

The USD/JPY was in negative territory on speculation about a Bank of Japan pivot from negative rates. On Friday, the USD/JPY was down 0.05% to 150.438.

However, the downside was modest, with an exit from negative rates hinged on the outcome of wage negotiations.

Wage negotiations could end before the Bank of Japan monetary policy decision on March 19, 2024. A marked increase in wages could allow the Bank of Japan to lift rates at the March meeting. However, the macroeconomic environment must improve for the hawks to run the March meeeting.