Stock market today: Japan’s Nikkei tops 40,000, as investors await China political meeting

HONG KONG — Asian shares were mostly higher on Monday ahead of China’s main annual political meeting, while Japan’s benchmark breached the 40,000 level for the first time.

US futures fell and oil prices were little changed.

Japan’s Nikkei 225 stock index rose to 40,314.64 but fell slightly. It rose 0.5% to close at 40,109.23, after a surge last week on Wall Street that pushed US stocks to new highs.

Stocks in Japan followed gains in other markets, driven by expectations of strong demand for artificial intelligence-related technology. They have also been boosted by continued easy credit policies, with the Bank of Japan pumping money into the economy to help support growth.

Hong Kong’s Hang Seng fell 0.5% to 16,500.50 and the Shanghai Composite index rose 0.3% to 3,034.78.

This week, the spotlight is on the Chinese National People’s Congress, the country’s most important political event. The stock market opens on Tuesday and investors are looking forward to updates on specific policies to help support the slowing economy, solve real estate market problems and stabilize financial markets.

Elsewhere in Asia, Seoul’s Kospi rose 1.2% to 2,674.27 after a private sector survey showed the country’s industrial activity grew slower in February than the previous month as overseas demand weakened.

The Australian S&The P/ASX 200 fell less than 0.1% to 7,742.40, and in Bangkok the SET rose 0.1%.

On Friday the S&The P500 rose 0.8% to 5,137.08 daily after hitting a record high. Inflation has soared, rising in 16 of the past 18 weeks on excitement about cooling inflation and a largely resilient U.S. economy.

The Dow Jones Industrial Average gained 0.2% to 39,087.38. Technology stocks led the market, with the Nasdaq index rising 1.1% to 16,274.94, a day after surpassing its previous high set in 2021.

Dell Technologies helped boost the stock market after surging 31.6%. It reported stronger earnings and revenue for the latest quarter than analysts expected, highlighting demand for its AI-optimized servers.

A crescendo in demand for artificial intelligence technology has helped drive shares higher over the past year. Dell has more than tripled in the last twelve months, while Nvidia is up more than 260%.

The mood was much grimmer in the banking sector, where New York Community Bancorp tumbled 25.9%. It warned investors last week that it found weaknesses in the way it rates loans internally, caused by ineffective supervision, risk assessment and monitoring activities.

Much attention has been paid to smaller regional banks after the crisis in the sector led to the collapse of several banks last year. One of them, Signature Bank, was swallowed up by NYCB, leaving the resulting bank facing increased scrutiny amid the battle for loans tied to real estate.

While NYCB faces many issues specific to it, there are concerns that banks across the industry may face challenges from lending for real estate projects.

They are under pressure in part because the Federal Reserve has raised its key interest rate to the highest level since 2001. High interest rates can put pressure on the financial system. The hope has been that the Fed will cut rates several times this year to provide some relief to banks and the broader economy.

The Fed has indicated that this will be possible if inflation continues to cool definitively towards its 2% target. But a series of stronger-than-expected reports on the economy have led traders to dial back their predictions for when the cuts could begin. The hope now is that the Fed can start in June, after traders set aside previous expectations for March.

On the bond market, the yield on ten-year government bonds fell on Monday from 4.25% at the end of Thursday to 4.21% on Monday.

In other trading, U.S. benchmark crude lost 2 cents to $79.95 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 2 cents to $83.57 a barrel.

The US dollar rose from 150.08 yen to 150.38 Japanese yen. The euro rose from $1.0841 to $1.0845.