In a significant market movement, Australian stocks extended their gains from the previous session, contrasting with Wall Street's overnight decline. Several key markets in the Asia-Pacific region remained closed for the Lunar New Year festivities. The S&P/ASX 200 saw an increase of 0.37%, reflecting continued investor confidence. Export and import price indexes provided mixed signals, with exports rising in the fourth quarter but dropping year-over-year. Meanwhile, Japan's stock indices showed slight declines, and U.S. benchmarks fell after the Federal Reserve's decision to maintain interest rates.
Market Performance in Australia and Japan
Australia's financial markets demonstrated resilience on Thursday, continuing the positive trend from the prior day. Despite the Fed's unchanged interest rate decision affecting Wall Street negatively, Australian investors remained optimistic. The S&P/ASX 200 index advanced by 0.37%, signaling a robust domestic market performance. This growth came against the backdrop of several Asia-Pacific markets being closed for the Lunar New Year celebrations.
The Australian Bureau of Statistics reported that the export price index climbed 3.6% in the fourth quarter of 2024, although it declined 8.6% over the year. Import prices rose slightly by 0.2% in the same quarter but dropped 1.9% annually. These figures indicate fluctuating global demand and supply dynamics impacting Australia's trade balance. Investors are closely monitoring these trends for potential long-term effects on the economy.
Global Market Reactions and Tech Sector Developments
While Australia's markets were buoyant, other regions showed varied responses. Japan's Nikkei 225 and Topix indices experienced minor drops of 0.17% and 0.21% respectively, reversing Wednesday's gains. The Lunar New Year holidays kept major markets like Taiwan, South Korea, Hong Kong, and China closed, limiting regional trading activity. Overnight, U.S. benchmark indexes also fell, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average recording losses.
The tech sector, particularly semiconductor companies, faced challenges. Nvidia, a leading player in artificial intelligence, saw its shares drop by 4.1%. Reports indicated discussions within the Trump administration about restricting chip sales to China due to concerns over the country's DeepSeek AI model. This development highlights the ongoing geopolitical tensions influencing global tech markets. Investors are wary of how such policies might impact future business operations and stock performance.