- Asian Stocks Rise as Xi Meeting Spurs China Tech: Markets Wrap
Shares in Hong Kong and China extended gains on expectations a meeting between President Xi Jinping and
business leaders will give a boost to private companies. A regional benchmark of shares rose while Australian
stocks increased losses after the central bank cut rates. The dollar strengthened against most of its Group-of
10 peers while US Treasury 10-year yields were up 3 basis points to 4.5% as the bond market reopened
Tuesday after the Presidents’ Day holiday. Earlier, Federal Reserve Governor Christopher Waller said recent
economic data supported keeping interest rates on hold until more progress was seen in inflation.
The optimism around China got a further lift Monday after a meeting between Xi and corporate leaders,
including Alibaba Group Holding Ltd. co-founder Jack Ma. Several analysts saw the conclave as a possible end
to the years-long crackdown on the private sector. Separately, DeepSeek’s breakthrough in artificial
intelligence has driven a rally of more than $1 trillion in Chinese shares. - Oil falls for 4th day on expectations Russia-Ukraine peace may lift supply
Oil prices fell for a fourth day on Monday on expectations a Russia-Ukraine peace deal could ease sanctions
disrupting supply flows and on concerns that global tariff wars could slow economic growth and weaken
energy demand. Brent crude futures slid 20 cents, or 0.2%, to $74.59 a barrel by 0112 GMT. Brent has
slumped 3.1% in the past four sessions after U.S. President Donald Trump and his administration officials
announced they had begun discussions with Russia to end the war in Ukraine. U.S. West Texas
Intermediate crude was at $70.51 a barrel, down 23 cents, or 0.3%. WTI is down 3.8% over the past four
sessions, and earlier on Monday dropped to as low as $70.12, its lowest since December 30. U.S. President
Donald Trump said on Sunday he believes he could meet “very soon” with Russian President Vladimir Putin to
discuss ending the war in Ukraine. His comments come as the United States and Russia are preparing for
initial talks in Saudi Arabia in the coming days. U.S. Secretary of State Marco Rubio also said on Sunday
Ukraine and Europe would be part of any “real negotiations” to end Moscow’s war, signaling that U.S. talks
with Russia this week were a chance to see how serious Putin is about peace. - Gold gains on easing US dollar; Trump tariff moves eyed
Gold prices rose on Monday as the U.S. dollar weakened, with investors awaiting further details on U.S.
President Donald Trump’s tariff plans, which could escalate global trade tensions. Spot gold rose 0.6% to
$2,899.73 per ounce as of 0313 GMT. Bullion scaled a record peak of $2,942.70 on February 11.
U.S. gold futures gained 0.4% to $2,912.50. The dollar index hovered near a two-month low as traders
assessed recent weaker-than-expected U.S. economic data. A weaker dollar makes bullion less expensive for
other currency holders. The dollar’s weakness and uncertainty around how Trump will engage with major
trading partners in enforcing his trade tariff policy are supporting gold, said Kelvin Wong, OANDA’s senior
market analyst for Asia Pacific. On Friday, Trump kept alive his drumbeat of tariff threats, saying levies on
automobiles would come as soon as April 2. Meanwhile, senior Trump administration officials will begin
peace talks with Russian and Ukrainian negotiators in Saudi Arabia in the coming days. - Australia central bank cuts rates for the first time in more than four years, flags economic uncertainties
The Reserve Bank of Australia on Tuesday cut benchmark interest rates for the first time in over four years,
joining ranks with other major global central banks, as softening inflation allows room for easing policy.
The RBA cut rates by 25 basis points to 4.10%, according to its statement on Tuesday. This marked the RBA’s
first easing since November 2020, when the central bank cut its key rate to a record low, as it battled a
slowing economy during the pandemic. “While today’s policy decision recognises the welcome progress on
inflation, the Board remains cautious on prospects for further policy easing,” the RBA board members said in
the statement. The central bank had held its policy rate steady at 4.35% since November 2023, following an
extended period of 13 rate hikes to tame inflation at home. The Tuesday decision was in line with market
expectations, with government bonds rallying in recent weeks on anticipation of an interest rate cut. The
yields on Australian 10-year government bonds dropped nearly 20 basis points since Jan. 13 to 4.450% on
Tuesday, according to LSEG data. The RBA has lagged behind major global central banks that kicked off an
easing cycle late last year. In its last policy meeting in December, the central bank said it was more
confident that inflation was declining and that might allow it to ease policy at some stage. Australia’s inflation
over the 12 months through the December quarter eased to 2.4%, compared with 2.8% in the 12 months
through September quarter, the Australian Bureau of Statistics data showed. The RBA has pegged its medium
term inflation target between 2% and 3%. On a quarter-on-quarter basis, the consumer price index rose 0.2%
in the quarter ending December, softer than the forecast 0.3%. One factor holding back the cash rate’s
descent has been the strength of the labor market, with unemployment rate hovering near a historic
low level of 4.0% in December. A cut in borrowing costs would also be a shot in the arm for the Labor
government which prepares for a tough election this year, amid sluggish economic growth. - Europe clambers to form Ukraine plan as U.S. forges ahead with Russia on peace talks
Europe is vying for a say in fast-advancing Ukraine peace talks as negotiations between the U.S. and Russia
get underway this week. European leaders gathered in Paris on Monday for an emergency summit, hastily
assembled by French President Emmanuel Macron after hopes of Europe’s involvement turned sour at the
Munich Security Conference. The U.S. has instead asked European allies to complete a questionnaire
outlining how they envisage security guarantees for Kyiv. - China’s Xi urges entrepreneurs to ‘show their talents’ in sign of support for private business
Chinese President Xi Jinping delivered a speech at a rare closed-door symposium with prominent
entrepreneurs on Monday, state news outlet Xinhua reported, urging entrepreneurs to “show their talents”
in a “new era” for the nation’s businesses. “The new era and new journey have broad prospects for the
development of the private economy and great potential,” he said, according to a Google-translated Xinhua
report. “It is time for private enterprises and private entrepreneurs to show their talents.” He added that
China must “unify our thinking, strengthen our confidence and promote the healthy and high-quality
development of the private economy,” while downplaying the sector’s current financial challenges as
temporary, local, in the process of being reformed. “We must focus on solving the problem of arrears of
accounts owed to private enterprises. We must strengthen law enforcement supervision, focus on rectifying
random charges, fines, inspections, and seizures, and effectively protect the legitimate rights and interests of
private enterprises and private entrepreneurs in accordance with the law,” he said, according to the report,
calling for a “clean relationship between government and business.” It comes amid concerns over the impact
of the Beijing administration on Chinese businesses and their relative autonomy. The government has also
been instrumental in supporting growth in recent months, through a spate of stimulus steps undertaken to
revive the lethargy of an economy internally weighed down by lackluster domestic consumption and an
extensive real estate slump. - India’s NTPC plans to spend $62 billion on 30GW of nuclear power, sources say
Indian state power company NTPC is looking to build 30 gigawatts (GW) of nuclear power capacity over the
next two decades, three times more than expected, at a cost of $62 billion, three sources said. The country’s
top power producer, which mainly runs coal-fired plants, is seeking land for its ambitious plan in a country
where local resistance to such projects is high, said the sources, who have direct knowledge of the matter.
NTPC was targeting 10 GW of nuclear capacity but tripled the goal after the government this month
announced plans to open up the sector to foreign and private investment, the sources said. “NTPC plans to
lead India’s nuclear power plan just as it did in the thermal sector,” one of the sources said. “The identified
sites are promising and hold potential for large capacity addition.” An NTPC spokesperson did not respond to
a request for comment. India has committed to setting up 500 GW of non-fossil fuel electricity generation
capacity by 2030 and wants to have at least 100 GW of nuclear capacity by 2047. State-run Nuclear Power
Corp of India is currently the sole operator of the country’s nearly 8 GW capacity, aiming for an increase to 20
GW by 2032. - BHP’s Profit Slump Prompts Dividend Cut as China Falters
BHP Group Ltd. said first-half profit slumped 23% as China’s faltering economy dampened demand for iron
ore, prompting the miner to trim its interim dividend to an eight-year low. The biggest miner posted
underlying attributable profit for the six months to Dec. 31 of $5.08 billion, it reported Tuesday. That was
below analyst estimates of $5.39 billion. Steelmaking ingredient iron ore remains the company’s biggest
earner — but only just — with copper now accounting for 44% of its revenue. BHP’s move to cut its dividend
to 50 cents a share, down from 72 cents the year before, will reinforce speculation the board has a renewed
focus on capital management as it pursues growth. Analysts were anticipating a dividend of 53.3 cents.
The slip in profits continues a trend for BHP since it posted record earnings of $33.1 billion for the year to
June 2022 as iron ore demand soared. Annual profits have since more than halved, with declining capital
returns and rising capital expenditure weighing on its shares. Still, Chief Executive Officer Mike Henry struck a
positive tone in Tuesday’s statement. “The demand for BHP products remains strong despite global economic
and trade uncertainties, with early signs of recovery in China, resilient economic performance in the US and
strong growth in India,” he said. BHP’s shares, which initially edged higher in Sydney following the
announcement, were down 0.6% at 10:10 a.m. Benchmark iron ore prices dipped 5% during the reporting
period, while copper fell 9%. - DeepSeek drives $1.3 trillion China stock rally as funds pile in
DeepSeek’s breakthrough in artificial intelligence is helping drive a rotation of stock funds back into China
from India. Hedge funds have been piling into Chinese equities at the fastest pace in months as bullishness on
the DeepSeek-driven technology rally adds to hopes for more economic stimulus. In contrast, India is
suffering a record exodus of cash on concerns over waning macro growth, slowing corporate earnings and
expensive stock valuations. China’s onshore and offshore equity markets have added more than $1.3 trillion
in total value in just the past month amid such reallocations, while India’s market has shrunk by more than
$720 billion. The MSCI China Index is on track to outperform its Indian counterpart for a third-straight month,
the longest such streak in two years. DeepSeek has shown “that China actually has companies that are
forming a vital part of the whole AI ecosystem,” said Ken Wong, an Asian equity portfolio specialist at
Eastspring Investments. His firm has been adding Chinese internet holdings over the past few months, while
trimming smaller Indian stocks that had “run up way past their valuation multiples.” - Tesla begins hiring in India after Modi meets Musk
Tesla Inc (NASDAQ:TSLA) has opened up positions to begin hiring in India, Linkedin listings showed, signaling
a potential entry into the country after CEO Elon Musk met Prime Minister Narendra Modi last week. Tesla
has 13 positions open in the Mumbai Metropolitan Region- India’s financial capital- and is seeking positions
ranging from sales advisors, operations managers, technicians, and customer support. The new openings
come shortly after Musk and Modi met in Washington, although it was not immediately clear whether the
two had discussed Tesla’s entry into Indian markets. Reuters had reported in December that Tesla was
seeking to open a showroom in India’s capital, New Delhi. But Musk had in April 2024 cancelled plans to visit
India. He had also scrapped plans to invest billions of dollars to set up a factory in the country. If Tesla were
to import cars into the country, they would face steep duties, given that Indian law charges dues of as high as
100% on automobile imports. But this could change as Prime Minister Modi seeks to appease the Donald
Trump administration by lowering import duties on American goods. Trump had threatened to impose steep
reciprocal tariffs on countries trading with the U.S.- a scenario that India has been seeking to avoid. Tesla is
looking to fresh markets, as it struggles with declining sales in its key European, North American and Chinese
markets. The sales declines come amid a mix of increased competition, weak automobile demand, as well as
brand issues associated with Musk. - Complaints targeting BYD flood Chinese consumer portal after smart EV launch
Complaints about BYD (SZ:002594) over its move to offer free smart driving features across most of its line
up have flooded a prominent Chinese auto quality platform, many from customers who said they had
overpaid for their cars. Over 4,700 complaints were filed against BYD cars between February 11-17 on
12365auto.com, a third-party auto consumer complaints platform, compared with about 150 the week
before and roughly 500 for January. BYD cars, including ones from its best-selling Ocean and Dynasty series,
also took the top 10 spots on a list the platform publishes that ranks models by the number of complaints
received. One complaint, sent in by an owner of a Seal 06 DM-i plug-in hybrid sedan, said they had repeatedly
asked the salesperson when buying the car if a newer model would be launched this year. “But only half a
month after I picked up the car, the new model hit the market with notable upgrades in configuration at the
same price,” the person said, adding that they wanted free upgrades and other compensation from the
company. The platform showed BYD responding to say that the company had passed on the complaint to the
relevant company departments. BYD did not respond to a request for comment. The complaints are one of
the ripple effects a prolonged price war and hyper competitiveness in the Chinese market are having as
automakers slash prices, offer free features or incentives, or roll out new models at a pace faster than other
countries. - Goodyear Tire Q4 2024 sees stock surge
Goodyear Tire (NASDAQ:GT) & Rubber Co. reported its fourth-quarter 2024 results, showing a 3% decline in
sales to $4.9 billion. Despite this, the company’s stock surged by 20.13% following strategic announcements
and robust free cash flow exceeding $1 billion. The company also highlighted plans for new product lines and
a significant modernization project at its Oklahoma facility. Key Takeaways: Goodyear’s Q4 2024 sales fell by
3% to $4.9 billion; Stock price increased by 20.13% after earnings call; Introduction of five new product lines
in 2025; Modernization of Oklahoma facility to add 10 million units of premium tire capacity; Free cash flow
exceeded $1 billion in Q4. Goodyear Tire & Rubber Co. experienced a decline in sales during Q4 2024,
reflecting broader market challenges. However, the company’s ability to maintain a strong segment
operating income of $385 million and achieve significant free cash flow highlights its operational resilience.
The company’s strategic focus on premium tire segments and digital sales enhancements positions it well
against competitors. Financial Highlights: Revenue: $4.9 billion, down 3% year-over-year; Segment Operating
Income: $385 million; SOI Margin: 7.8% (6.7% excluding insurance proceeds); Free Cash Flow: Exceeded $1
billion in Q4. Market Reaction: Goodyear’s stock price rose sharply by 20.13% following the earnings call,
reaching a new level compared to its 52-week range of $7.27 to $13.86.
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