Global markets on upward trend after Beijing’s assurances

ISTANBUL

Global markets saw gains on Monday following Beijing’s assurances to strengthen China’s private sector against US tariffs, aiming to mitigate their impact.

Meanwhile, Washington’s major trade partners are also bracing for potential scenarios.

Speaking at a high-level private sector symposium, Chinese President Xi Jinping reaffirmed that the country’s policies supporting private businesses are integral to its “socialist system with Chinese characteristics” and “cannot and will not change.”

He noted that while illegal activities in the private sector would be investigated and penalized, businesses would also receive legal protection.

Xi said challenges facing private enterprises stem from industrial transformation and restructuring, describing them as temporary hurdles that can be overcome. He pledged government support to eliminate roadblocks by opening competitive infrastructure sectors and addressing high financing costs for private firms.

Analysts say China is working to enhance its private sector’s competitiveness and reduce sectoral vulnerabilities.

Meanwhile, investors remain focused on uncertainty surrounding the Federal Reserve’s next steps in light of US President Donald Trump’s trade policies.

Federal Reserve Governor Michelle Bowman said monetary policy is in a “good place,” though inflation remains high, adding that she expects price increases to moderate this year.

Philadelphia Fed President Patrick Harker said the policy stance is appropriate given expectations for inflation progress, while also predicting that interest rates will decline in the long term.

Analysts expect the Fed to take a cautious approach, closely monitoring the effects of Trump’s reciprocal tariffs, while uncertainty lingers over the timing of the first rate cut of the year.

The US 10-year futures bond yield rose to 4.51% on Monday, while the US Dollar Index climbed 0.4% to 107.

Gold closed Monday at $2,899.33 per ounce and opened Tuesday up 0.4% at $2,910. Brent crude oil was trading at $75.1 per barrel, up 0.1%.

The New York Stock Exchange remained closed Monday for Presidents’ Day, while US index futures opened Tuesday on a positive note.

European markets gain amid defense spending outlook

European stock markets also rose Monday, led by defense firms on expectations of increased military spending in the region.

NATO Secretary General Mark Rutte, speaking at the Munich Security Conference 2025, said Europe must boost defense spending beyond the current 2% threshold, adding that the US will closely monitor these commitments.

British Prime Minister Keir Starmer warned that the UK faces a “generational challenge” to national security and urged higher defense spending across Europe.

While recession concerns persist, analysts are looking to the upcoming manufacturing Purchasing Managers’ Index (PMI) data for insights into the eurozone’s economic trajectory.

On Tuesday, Germany’s DAX 40 rose 1.26% to a record close, the UK’s FTSE 100 gained 0.41%, France’s CAC 40 climbed 0.13%, and Italy’s FTSE MIB 30 advanced 0.92%. European index futures opened Monday in positive territory.

Asian markets rally on AI optimism

In Asia, investor sentiment was buoyed by Xi’s statements and optimism over the success of China’s artificial intelligence (AI) model DeepSeek, driving tech stocks higher.

Alibaba shares gained 4.4%, Xiaomi 6%, Tencent 3.4%, and Meituan 4%.

Japan’s 10-year government bond yield rose to 1.41%, its highest level since March 2010.

The Reserve Bank of Australia cut its benchmark interest rate by 25 basis points to 4.1% — its first rate cut since October 2020 — citing weaker inflation.

Japan’s Nikkei 225 rose 0.2%, South Korea’s Kospi 0.6%, China’s Shanghai Composite 0.2%, and Hong Kong’s Hang Seng 1.9%.

Türkiye’s market sees slight decline

Türkiye’s benchmark BIST 100 index fell 0.42% to 9,836.49 on Monday.

The US dollar/Turkish lira exchange rate edged up 0.1% to 36.2429 at Monday’s close and was trading at 36.2460 on Tuesday.