The Nikkei 225 soars close to 34-year high

Alibaba Group's weak earnings trigger a nearly 6% drop in its Hong Kong shares while Japanese stocks surge.

By Nadia Elbilassy | @Nadia Elbilassy | 8 February 2024

Market open
  • Nikkei 225 rallies close to a 34-year high, driven by a 10% surge in SoftBank Group Corp.

  • US dollar remains steady as Fed officials resist immediate policy easing.

  • Market expectations indicate an 18.5% chance of rate cuts in March.

On the Market Watch:

Stock Markets

SoftBank Group Corp fuels a rally in the Nikkei 225, close to a 34-year high, after the company’s stock rose 10% as it appeared set to secure almost $16 billion from a recent upswing in its chip designing subsidiary.

Arm Holdings ADR the subsidiary foretold stronger earnings due to heightened demand for artificial intelligence, contributing significantly to SoftBank's notable rally.

On the other hand, weaker earnings from Alibaba Group added to worries about subdued consumer spending leading to a nearly 6% decline in the e-commerce giant's shares in Hong Kong trading, as it reported earnings below expectations for the December quarter.

Alibaba's losses had a ripple effect, causing a 1.1% drop in Hong Kong's Hang Seng index. The index set a gloomy tone, with concerns about Chinese stocks dampening sentiment ahead of the week-long Lunar New Year holiday.

In Currencies

The US dollar was little changed as markets priced in comments from Fed officials overnight. Several Fed officials pushed back on starting to ease so soon.

Markets are pricing in an 18.5% change that the Fed could begin cutting rates in March while majority see that happening in May.

Meanwhile, the euro and the pound saw a rebound, with the Euro stabilizing around 1.077 and the Pound around 1.262.