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Asian Stocks Surge as Hong Kong Rallies on AI Hype and China Stimulus

Asian Stocks Surge as Hong Kong Rallies on AI Hype and China Stimulus. Source: Photo by RDNE Stock project

Asian stocks climbed on Tuesday, with Hong Kong leading gains as optimism over China’s economic stimulus and growing confidence in AI innovation fueled a rally in major tech stocks.

Hong Kong’s Hang Seng Index jumped nearly 2% to a three-year high, driven by a 10% surge in Baidu (NASDAQ:BIDU) after launching two new AI models. Alibaba (NYSE:BABA) gained over 4% following reports that its 2025 performance metrics will focus on AI-driven growth. BYD Co (HK:1211) also hit a record high after unveiling fast-charging EV technology.

China’s broader markets advanced, with the Shanghai Shenzhen CSI 300 and Shanghai Composite adding 0.3% and 0.2%, respectively. Investors welcomed Beijing’s stimulus plans, boosting confidence in a 2025 economic recovery.

Japanese stocks outperformed, with the Nikkei 225 up 1.6% and the TOPIX rising 1.5%. Warren Buffett’s Berkshire Hathaway increased its holdings in Japan’s five largest trading houses—Itochu Corp. (TYO:8001), Mitsui & Co. (TYO:8031), Mitsubishi Corp. (TYO:8058), Sumitomo Corp. (TYO:8053), and Marubeni Corp. (TYO:8002)—to nearly 10%, fueling strong gains.

Markets also focused on the Bank of Japan’s upcoming meeting, where the central bank is expected to hold rates but adopt a hawkish tone amid signs of economic resilience.

Elsewhere, Australia’s ASX 200 rose 0.2%, South Korea’s KOSPI gained 0.3%, and Singapore’s Straits Times Index surged 0.9%. India’s Nifty 50 futures pointed to a positive open, tracking regional momentum.

Despite strong stock market gains, U.S. stock index futures dipped in Asian trading as investors remained cautious over trade tariffs, a potential recession, and an upcoming Federal Reserve meeting. Meanwhile, heightened geopolitical tensions in the Middle East dampened risk appetite.

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