ASIA STOCKS: Asian Equities Mixed As Trade Tensions Weigh On Sentiment

Asian equities are mixed today as trade tensions weighed on sentiment, with US-China tariffs and US Postal Service suspending inbound parcels from China adding to uncertainty. Investors remain cautious amid signs of slowing Chinese services activity and a weakening yuan, though Goldman Sachs sees potential for a 14% rally in the MSCI China Index if Beijing delivers strong stimulus.

• Chinese stocks fell as investors returned from the Lunar New Year break, reacting to escalating US-China trade tensions. The CSI 300 dropped 0.6%, while the Hang Seng China Enterprises Index slumped 2%. Tech shares outperformed, led by AI software firms after DeepSeek’s release of a lower-cost large language model, though AI hardware stocks weakened on concerns about reduced infrastructure spending.
• Japanese stocks erased early gains as the yen strengthened on expectations of further BOJ rate hikes following strong wage data. The Nikkei is 0.20% lower after rising 0.8% earlier, while the Topix trade flat with banks like Mizuho and MUFG benefiting from rate hike speculation.
• In South Korea the Korea Development Bank announced plans to create a ₩34 trillion ($25.5b) tech fund to support sectors like batteries and biotech, pending parliamentary approval. The KOSPI is trading 1.20% higher today. Taiwan's TAIEX is 1.75% higher as  TSMC trade 1.90% higher.
• Australia's ASX 200 rebounded 0.55% after Monday’s losses, tracking Wall Street gains. Mining stocks outperformed, with BHP, Fortescue, and Rio Tinto rising over 2%. Gold stocks also gained as the gold price hit a record $2,845/oz.