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Chinese stocks fall after week-long trading pause

Chinese equities were under pressure Wednesday following a week-long holiday break. Traders were confronted at the reopening by new US tariffs and AI sector volatility while weak services sector data also contributed to the poor sentiment. Elsewhere in Asia, markets trading mostly higher on Wednesday. US stock markets experienced a partial recovery on Tuesday as investors reacted positively to a temporary suspension of tariffs announced by US President Donald Trump. On the other hand, markets were confounded by Trump's unexpected suggestion to transform Gaza into a luxury travel destination, however, causing no immediate impact on oil prices.

Date
Author
Shane Strowmatt, LGT
Reading time
5 minutes

China Shanghai
© Shutterstock

Chinese stocks initially rose but faced pressure later in the session as markets reopened after a week-long holiday break. Traders were confronted by new US tariffs and AI sector volatility. The CSI 300 declined by 0.6% on Wednesday, while Hong Kong’s Hang Seng Index dropped 1.1%. Adding to the poor sentiment was the services Purchasing Managers’ Index (PMI), which showed China's services sector grew at a slower pace in January. The Caixin/S&P Global services PMI fell to 51.0 from 52.2 in December.

Elsewhere in Asia, Japan’s Nikkei 225 was trading essentially flat, up just 0.1%, while Korea’s Kospi rose by 1.1% as the country's consumer price index increased by 2.2% year-on-year in January. Australia’s S&P/ASX 200 was 0.5% higher.

US stocks rebound amid trade policy shifts

US stock markets experienced a partial recovery on Tuesday as investors reacted positively to a temporary suspension of tariffs announced by Trump. The Dow Jones Industrial rose by 0.3% to 44,556.04 points, while the S&P 500 gained 0.7% and the Nasdaq 100 surged 1.3%. The market's optimism stemmed from a 30-day tariff suspension agreement with Mexico and Canada, and a measured response from China, despite ongoing trade tensions. European stocks were also mostly higher on Tuesday, with the Euro Stoxx 50 gaining 0.9%.

Alphabet and AMD shares fall on missed revenue targets

Google parent Alphabet's shares dropped 7.6% in extended trading on Tuesday after reporting a slowdown in cloud revenue growth and announcing a USD 75 billion AI investment for 2025, which exceeded Wall Street expectations. Despite a 12% rise in overall revenue to USD 96.47 billion, cloud revenue increased by only 30% to USD 11.96 billion, missing market expectations. Meanwhile, AMD's stock fell 8.8% in after-hour trading on Tuesday, as its data centre sales, which grew 69% year-on-year to USD 3.86 billion, also missed estimates.

US job openings fall in December

The US Bureau of Labor Statistics reported on Tuesday that job openings decreased to 7.6 million in December, down by 556,000 from November. Hires and total separations remained relatively stable at 5.5 million and 5.3 million, respectively. Over the year, job openings declined by 1.3 million, with significant drops in professional and business services, health care and social assistance, and finance and insurance. Conversely, job openings in arts, entertainment, and recreation increased.

UBS shares fall despite profit beat

UBS shares fell 7.2% on Tuesday after the Swiss bank reported a fourth-quarter net profit of USD 770 million, surpassing its own estimate of USD 483 million but missing analysts' forecast of USD 886.4 million. Revenue for the period was USD 11.635 billion, slightly below expectations. The bank announced a USD 3 billion share buyback plan for 2025, which failed to impress investors. UBS also proposed a USD 0.90-per-share dividend for 2024, a 29% increase year-on-year.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Boston Scientific, GSK, Novo Nordisk, TotalEnergies, Toyota, Uber, and Walt Disney.

Economic data in focus: euro-area Producer Price Index (11:00), US ADP National Employment Report (14:15), US ISM non-manufacturing index (16:00).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
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