Travel Stocks Power Tokyo Rally, China Domestic EV Sales Surge

Arjun Pandit
01 Feb, 2024
Mumbai

Market indexes in Japan, India, Australia, Korea, and Hong Kong advanced but fell in mainland China.

Market sentiment was positive after domestic corporations in the region reported rising profits, and the market mood was further reinforced by strong gains in overnight trading in New York.

About 61%, or 270 companies listed on the Tokyo Stock Exchange's prime market, reported an increase in profit, largely driven by a mix of price increases and higher demand, according to a report by Nikkei Asia.

 

Japan Tourism and Travel Companies Lift Earnings Estimate

Stocks in Tokyo traded higher after positive corporate earnings, and overnight gains in New York supported the market enthusiasm.

Domestic travel-related companies traded higher on the back of a sustained recovery in tourism and rising profit estimates.

The Nikkei 225 jumped 36,208.84, and the Topix added 0.4% to 2,543.68, tracking market gains in New York.

ANA Holding decreased 1% to ¥3,276.0 following a surge of more than 2% after the All Nippon Airways operator revised its annual earnings forecast on Wednesday.

Central Japan Railway, or JR Tokai, added 1.7% to ¥3,718.0 after the operator of the Shinkansen bullet train said revenue in the first half of December jumped 77% to 60 billion yen on strong inbound ridership.

East Japan Railway, or JR East, jumped 1.6% to ¥8,936.0 after the railroad operator revised its fiscal year profit growth estimate.

The company estimated profit to increase by 66% to 165 billion yen, or $1.1 billion, on the back of a rebound in foreign tourists and commuter traffic.

 

China EV Sales Surge In January, Anta-backed Amer Sports Jump In New York IPO

China stocks traded mixed, and tech stocks and electric vehicle makers were the focus of trading.

Chinese authorities permitted the release of a new batch of online video games, suggesting that the government is easing its stance on the industry.

The CSI 300 index declined 0.7% to 3,194.79, but the Hang Seng Index rose 0.6% to 15,657.26.

NetEase, Baidu, ByteDance, and Alibaba advanced between 1.5% and 4.0%.

Electric vehicle makers also traded higher after the three leading suppliers reported a sharp jump in local sales.

Geely, Li Auto, and Xpeng reported that electric vehicle sales in January jumped between 58% and 110%, according to regulatory filings.

Geely Automobile Holding said sales in January soared 110% to 213,487 vehicles, surpassing BYD's sales.

BYD sales jumped 33% to 201,493 electric vehicles after exports surged 248% to 36,174 from a year ago, respectively.

XPeng sales increased 58% from a year ago to 8,250 vehicles, but fell 59% from 20,115 in December.

Li Auto sales in January jumped 106% to 31,165 vehicles after the sale of extended-range SUVs advanced.

Chinese property developers advanced after the People's Bank of China injected 150 billion yuan of liquidity to support property sales.

China Resources Land advanced 3.7% to HK$24.10, Longfor Group added 3.6% to HK$8.74, and China Overseas Land and Investment gained 3.3% to HK$11.94.

Anta Sports Products advanced 3.0% to $67.15 after the company's U.S. subsidiary completed its $1.4 billion initial public offering in New York.

Amer Sports, based in Finland and backed by Anta, sold 105 million shares at $13 each.

Amer Sports stock closed up 3.1% to $13.40 in New York.

 

India Indexes Extend Weekly Gains After Investors Cheer Interim Budget Measures

Stocks in Mumbai advanced following the release of the interim budget, and bond yields edged lower after the government estimated lower gross borrowing.

The Nifty and Sensex indexes edged higher after investors welcomed the government's focus on infrastructure investing and retained its focus on fiscal consolidation.

Economists and market participants generally welcomed the government's plan to reduce its borrowings, lower overall subsidies, and maintain income tax rates.

The government bond yield edged lower after Finance Minister Sitharaman estimated the budget deficit to fall to 5.8% of the gross domestic product, lower than the 5.9% previously estimated.

Investors welcomed the government's plan to lower gross borrowing in the interim budget.

The budget calls for government borrowing to decrease by 8% to ₹15.43 lakh crore, or trillion, in the fiscal year 2025.

The interim budget for the fiscal year 2025 estimated an increase in GST tax collection of 11.5%, in corporate tax of 11.7%, and in income tax of 13%.

The budget also calls for an increase in allocation for infrastructure investment for the fourth year in a row.

Infrastructure investment is estimated to increase by 17% to ₹11.1 lakh crore, or trillion, following the 33% rise in the fiscal year 2024.

The Sensex index increased 332.26 points to 71,977.56, and the Nifty index rose 115.30 points to 21,812.75.

The yield on the 10-year Indian government bonds decreased to 7.06%, and the Indian rupee strengthened ₹82.93 against the U.S. dollar.

Bata India declined 2% to ₹1,457.55 after the footwear retailer reported a decline in earnings.

Revenue in the December quarter rose 0.4% to ₹903.4 crore from ₹900 crore, and net income dropped 30% to ₹58 crore from ₹83 crore a year ago, respectively.