Asian stocks mostly advanced on Tuesday, driven by the rally of Chinese technology stocks ahead of major earnings reports. Meanwhile, Australian stocks dipped despite the Reserve Bank of Australia’s (RBA) rate cut, as policymakers signaled a cautious stance on further easing.

1. Hong Kong Tech Stocks Continue AI Rally

Hang Seng Surges 2%

• Hong Kong’s Hang Seng Index surged to a four-month high, continuing its strong momentum.
• Alibaba (NYSE:BABA) rallied nearly 5%, while Baidu (NASDAQ:BIDU) gained 0.4%.
• The rally was fueled by AI optimism ahead of quarterly earnings reports from China’s top tech firms.

AI Driving Market Confidence

• Chinese tech stocks have soared since late January, following the release of DeepSeek, a strong AI model.
• Goldman Sachs analysts predict faster AI adoption in China, boosting long-term economic growth.
• Investors are betting on China’s AI sector to rival U.S. leaders like Microsoft (NASDAQ:MSFT) and NVIDIA (NASDAQ:NVDA).

Shanghai Composite & CSI 300 were flat, but Chinese tech stocks outperformed the broader market.

2. Global Markets Await Key Events

Wall Street Futures Mixed Amid Trade & Rate Uncertainty

• U.S. markets were closed on Monday, leaving Asian markets to set the tone.
• Wall Street futures edged up slightly, as investors await clarity on:
  • Trump’s trade tariffs and their impact on global markets.
  • Federal Reserve’s rate policy, with Powell’s testimony in focus.

Australian Stocks Fall Despite RBA’s Rate Cut

• The Reserve Bank of Australia (RBA) cut interest rates by 25 basis points, as expected.
• However, the hawkish tone on future cuts kept markets cautious.
• ASX 200 declined, reacting negatively to the central bank’s wait-and-see approach.

3. Key Takeaways for Investors

China’s AI Boom Continues

• DeepSeek’s rapid rise highlights China’s AI ambitions, with big tech earnings this week set to reinforce the trend.

Earnings Reports in Focus

• Alibaba & Baidu’s quarterly results will be key in assessing the sustainability of the AI-driven rally.

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Final Thoughts

Chinese tech stocks remain strong on AI optimism.
Investors await major earnings reports from Alibaba & Baidu.
U.S. & Australian market trends depend on policy decisions.

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