Asian shares advance, Japan gains after elections
rose at the open after
US stocks
soared to a record ahead of a busy earnings week that will include results from Tesla Inc. and Alphabet Inc.
Shares in Tokyo — where Prime Minister Shigeru Ishiba said he would carry on as leader even as the ruling coalition lost its majority in the upper house election — gained 1% as trading resumed after a public holiday Monday. The MSCI regional stock gauge advanced 0.3% after the S&P 500 index closed above 6,300 for the first time.
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A cohort of the world's largest asset managers is leaning harder into the rally in risk assets as US stocks push to fresh highs, defying persistent trade and geopolitical tensions. The high-octane wager is that while President Donald Trump is threatening to disrupt the economic order anew, he will step back from the brink.
Traders are now looking for signs of resilience in
corporate earnings
amid tariff risks.
'Earnings season will move into full swing this week, and the guidance will be more important than usual,' said Matt Maley, chief market strategist at Miller Tabak. 'This guidance is going to have create a very large increase in earnings estimates if the market is going to reach some of the targets that exist on Wall Street right now.'
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Investors also kept a close eye on tariff headlines. Trump may issue more unilateral tariff letters before Aug. 1, White House Press Secretary Karoline Leavitt said. More trade deals may also be reached before the deadline, she added.
Meanwhile, Philippine President Ferdinand Marcos Jr. will be the latest foreign leader eager to make a deal before the US-imposed Aug. 1 tariff deadline when he visits Trump in the Oval Office later Tuesday.
Market participants are focused on the performance of
Japanese markets
as investors weigh policy uncertainty after the ruling Liberal Democratic Party's historic loss in Sunday's elections.
The yen depreciated slightly against the dollar after strengthening as much as 1% Monday following Ishiba's loss.
With the election out of the way, 'the possibility of a 'sell Japan' trend, due to worries over extreme fiscal spending, has lessened,' supporting stock prices, said Hideyuki Ishiguro, chief strategist at Nomura Asset Management. However, uncertainty around the new political landscape is likely to cap gains, he said.
In the US, the second-quarter earnings season is off to a ripping start, with consumer strength powering resilient corporate profits. Yet after hitting a series of all-time highs, the S&P 500 is trading around 22 times expected 12-month profits.
'While stocks may be due for a breather, we believe the bull market remains intact,' said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. 'We maintain our June 2026 S&P 500 price target of 6,500, and recommend using volatility as an opportunity to phase into markets.'
The S&P 500 hasn't posted a 1% up or down day since late June, and Mark Hackett at Nationwide notes that volatility gauges also remain 'suspiciously quiet.'
'This calm is unusual and may reflect both investor fatigue and institutional hesitation to fight the current trend,' he said. 'We're in a window where calm can quickly turn to complacency. While a break in either direction is possible, current positioning suggests we'd bet on a rally before a drop.'
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Mint
11 minutes ago
- Mint
JLR margin math wobbles on twin hit from China tax, EU-US trade deal move
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Now, analysts are warning that these latest trade and policy shifts risk derailing the company's already modest FY26 guidance of 5-7% earnings before interest and tax (EBIT) margin. JLR had banked on reduced tariffs on exports from its Slovakia plant to the US, but that scenario may now be overtaken by events. The EU, which is finalizing a trade deal with the US for lower tariffs, has proposed that auto firms that have manufacturing in that country and export from there should be given some relaxation from 25% tariffs on imports. 'The two combined geopolitical headwinds pose a downward risk to the company's FY2026 guidance of 5-7% EBIT margin, which had only factored in lower tariffs on its exports from Slovakia to the US after the EU-US trade deal," analysts at Kotak Institutional Equities wrote in a 21 July note. Agreeing with a possible near-term pressure on JLR, analysts at Ashika Institutional Equities said in a note on 23 July that the UK-headquartered firm could face challenges on the two fronts, given the latest developments. 'Both developments present strategic challenges for JLR. In China, pricing pressure from new taxes could impact high-end model sales, while in the West, the absence of US manufacturing limits JLR's ability to benefit from policy support, thereby increasing its relative vulnerability in key export markets," the Kotak note said. JLR rivals' BMW and Mercedes stand to benefit the most if EU's proposal is accepted by US as they have plants in the country, from where they export elsewhere. JLR has manufacturing plants in the UK and Slovakia in Europe. In India, it has an assembly plant in Pune, where it assembles several models like Range Rover, Range Rover Sport, Velar, Discovery and Evoque. In FY25, JLR sold 10% fewer vehicles than the previous year in China at 47,200, while Europe saw an 11% decline at 71,700 units. Its biggest market, North America, recorded a 22% jump in sales to 129,000 cars during the year. However, JLR has faced headwinds in the international market since March, when US President Donald Trump announced a blanket 25% tariff on all automobile imports. During April-June, the first quarter of this FY, the maker of Range Rover SUVs sold 87,286 units, 11% fewer than a year ago due to a pause in shipments to the US in April to assess the tariff impact. JLR, which was acquired by Tata Motors in 2008 for $2.3 billion, contributed about 71% to Tata Motors overall revenue in the last fiscal. Analysts have earlier expressed concern that the near-term outlook for the company is weak. 'In JLR, discontinuance of 'Jaguar' ICE models, loss of market share in the China region and imposition of tariffs in the US shall lead to volume contraction ahead," Nuvama Institutional Equities had said in a note on 16 June. The company has acknowledged that its free cash flow will reduce to nearly nil in the current financial year. With the company looking to tackle the negative effects of various headwinds world over, it expects to end the current fiscal year with nil free cash flows. However, the management had earlier said the impact could have been even worse and the measures being implemented to offset the hit are leading to savings. 'The tariff impact will be primarily on Jaguar Land Rover. Tariff has gone up from 2.5% to 27.5%, and under the UK-US FTA, the tariff is 10%. The overall impact would have been 1.6 billion pounds," Tata Group Chairperson N. Chandrasekaran told shareholders at Tata Motors' annual general meeting on 20 June. 'But due to the steps taken by JLR, the impact has gone down to 600 million pounds, which is visible in the margin guidance," he added. At Tata Motors' annual investor day event also in June, the company said JLR will undertake several measures to drive savings, including manufacturing cost reduction, lowering vehicle warranty costs, and improving cost efficiencies in the overall value chain. The measures will collectively lead to savings worth 1.4 billion pounds per annum till financial year 2028, the company said. Jaguar Land Rover declined to comment when asked about the likely impact of the proposed EU-US trade deal and the Chinese luxury tax. The impact of the headwinds reflects in the company's share price. In 2025, Tata Motors' share price is down 8%, even as Nifty Auto has risen by 4%.
Mint
11 minutes ago
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India Today
11 minutes ago
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Trump AI policy: Build supercomputers, fight ‘woke' bias, slash red tape
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That includes accelerating the sale of AI technology abroad and making it easier to construct the energy-hungry data centre buildings that are needed to form and run AI products. It also includes some AI culture war preoccupations of the circle of venture capitalists who endorsed Trump last signed three executive orders on Wednesday to deliver on the plan. They seek to fast-track permitting of AI construction projects, expand US tech exports and get rid of 'woke' in had given his tech advisers six months to come up with new AI policies after revoking President Joe Biden's signature AI guardrails on his first day in PLAN: GLOBAL DOMINANCE, CUTTING REGULATIONSThe plan prioritises AI innovation and adoption, urging the removal of any barriers that could slow down adoption across industries and government. 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When asked to show an American Founding Father, it created pictures of Black, Asian, and Native American quickly fixed its tool, but the 'Black George Washington' moment remained a parable for the problem of AI's perceived political bias, taken up by X owner Elon Musk, venture capitalist Marc Andreessen, Vice President JD Vance and Republican among the plan's goals is to speed up permitting and loosen environmental regulation to accelerate construction on new data centers and factories. It condemns 'radical climate dogma' and recommends lifting environmental restrictions, including clean air and water has previously paired AI's need for huge amounts of electricity with his own push to tap into U.S. energy sources, including gas, coal and nuclear.'We will be adding at least as much electric capacity as China,' Trump said at the Wednesday event. 'Every company will be given the right to build their own power plant.'Many tech giants are already well on their way toward building new data centers in the U.S. and around the world. OpenAI announced this week that it has switched on the first phase of a massive data center complex in Abilene, Texas, part of an Oracle-backed project known as Stargate that Trump promoted earlier this year. Amazon, Microsoft, Meta and xAI also have major projects tech industry has pushed for easier permitting rules to get its computing facilities connected to power, but the AI building boom has also contributed to spiking demand for fossil fuel production, which contributes to global Nations Secretary-General Antonio Guterres on Tuesday called on the world's major tech firms to power data centers completely with renewables by plan includes a strategy to disincentivize states from aggressively regulating AI technology, calling on federal agencies not to provide funding to states with burdensome regulations.'We need one common sense federal standard that supersedes all states, supersedes everybody,' Trump said, 'so you don't end up in litigation with 43 states at one time.'WHO BENEFITS FROM TRUMP 'S AI ACTION PLAN?There are sharp debates on how to regulate AI, even among the influential venture capitalists who have been debating it on their favorite medium: the some Trump backers, particularly Andreessen, have advocated an 'accelerationist' approach that aims to speed up AI advancement with minimal regulation, Sacks has described himself as taking a middle road of techno-realism.'Technology is going to happen. 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