Asian Markets Surge: Hong Kong Stocks Soar on AI Optimism and Stimulus Hopes; Japan Gains on Buffett’s Investment

Asian stocks climbed on Tuesday, with Hong Kong’s markets leading the charge amid growing confidence in China’s artificial intelligence (AI) sector and expectations of further economic stimulus. Meanwhile, Japan’s equities surged, fueled by Warren Buffett’s Berkshire Hathaway boosting its stakes in the country’s top trading firms.

Asian Stocks Rally, Tracking Wall Street’s Momentum

Regional markets followed Wall Street’s overnight gains, where a mix of bargain hunting and economic resilience helped U.S. stocks recover from correction territory. However, sentiment remained cautious as U.S. stock index futures slipped during Asian trade, weighed down by concerns over trade tariffs, a potential recession, and an upcoming Federal Reserve meeting set to begin later on Tuesday.

Geopolitical tensions in the Middle East also dampened risk appetite after Israel intensified strikes against Hamas, signaling the possible collapse of a January ceasefire agreement.

Hong Kong Stocks Surge on AI Growth and China Stimulus Optimism

Hong Kong’s Hang Seng Index emerged as Asia’s top performer, soaring nearly 2% to reach a three-year high. The rally was primarily driven by heavy buying in leading technology stocks, fueled by enthusiasm for AI advancements and Beijing’s economic stimulus plans.

Among standout performers:

• Baidu Inc. skyrocketed 10% after unveiling two advanced AI models, one of which reportedly rivals DeepSeek, a major topic in the AI industry.

• Alibaba Group gained over 4% following reports that CEO Eddie Wu has directed the company’s divisions to prioritize AI-driven growth for 2025.

• BYD Co., the Chinese electric vehicle (EV) giant and key Tesla competitor, hit a record high after launching a revolutionary fast-charging technology that promises ultra-fast EV charging within minutes.

Beyond the tech sector, broader Chinese markets rallied after Beijing disclosed further details of its 2025 economic recovery strategy, boosting investor confidence in the region’s growth outlook.

Japan’s Stock Market Rises on Buffett’s Investment in Trading Houses

Japanese stocks followed suit, with the Nikkei 225 Index climbing 1.6% and the TOPIX Index rising 1.5%. The gains were largely attributed to strong performances by Japan’s five largest trading firms—Itochu Corp., Mitsui & Co., Mitsubishi Corp., Sumitomo Corp., and Marubeni Corp.—after Berkshire Hathaway increased its holdings in each company to nearly 10%.

Warren Buffett has consistently expressed confidence in these firms and hinted at plans to expand his investments further, reinforcing positive sentiment in the Japanese market.

Investor focus in Japan remains on the upcoming Bank of Japan (BOJ) meeting, where policymakers are widely expected to maintain interest rates. However, market watchers anticipate a more hawkish tone given Japan’s recent inflation resilience and economic strength.

(Sources: investing.com, reuters.com)