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Stock market today: Japan’s Nikkei surpasses 40,000 points as investors await China policy meeting

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HONG KONG (AP) — Asian stocks were mostly higher Monday ahead of China’s biggest annual political gathering, while Japan’s benchmark index rose above the 40,000 level for the first time.

U.S. futures fell and oil prices were little changed.

Japan’s Nikkei 225 stock index reached 40,314.64 but fell slightly. It gained 0.5% to close at 40,109.23 following a rally last week on Wall Street that pushed U.S. stocks to new highs.

Japanese stocks followed gains in other markets, driven by expectations of strong demand for technologies associated with artificial intelligence. They were also boosted by continued accommodative 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 mainly on China’s National People’s Congress, the country’s most important political event. It opens Tuesday and investors are awaiting updates on specific policies aimed at supporting the slowing economy, solving problems in the real estate market and stabilizing financial markets.

Elsewhere in Asia, the Kospi in Seoul jumped 1.2% to 2,674.27 after a private sector survey showed the country’s manufacturing activity grew at a slower pace in February compared with the previous month , while foreign demand has weakened.

Australia’s S&P/ASX 200 index fell less than 0.1% to 7,742.40, and in Bangkok the SET edged up 0.1%.

The S&P 500 rose 0.8% to 5,137.08 on Friday after setting an all-time high. It has been on a meteoric rise and has climbed in 16 of the past 18 weeks on enthusiasm over slowing inflation and an overall resilient U.S. economy.

The Dow Jones Industrial Average gained 0.2% to 39,087.38. Technology stocks led the market and the Nasdaq Composite Index jumped 1.1% to 16,274.94, a day after surpassing its previous record set in 2021.

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

Growing demand for artificial intelligence technology has helped propel stocks higher over the past year. Dell has more than tripled in the past 12 months, while Nvidia has surged more than 260%.

The mood was much gloomier in the banking sector, where New York Community Bancorp fell 25.9%. Last week, it warned investors that it had found weaknesses in the way it internally reviews loans, caused by ineffective monitoring, risk assessment and control activities.

Much attention has been paid to smaller regional banks after last year’s crisis in the sector led to the collapse of several of them. One of them, Signature Bank, was absorbed by NYCB, forcing the resulting bank to face stricter oversight amid a struggle for real estate-related lending.

Although NYCB faces many issues specific to it, the concern is that banks in the sector are facing challenges related to lending for real estate projects.

They are under pressure in part because the Federal Reserve raised its main interest rate to its highest level since 2001. High interest rates can squeeze the financial system. The hope was that the Fed would cut interest rates several times this year to provide some relief to banks and the economy as a whole.

The Fed has indicated it may do so if inflation continues to slow decisively toward its 2% target. But a series of more positive-than-expected economic reports caused traders to push back their forecasts on when the cuts might begin. The hope now is that the Fed can kick off in June after traders abandoned their earlier expectations for March.

On the bond market, the yield on 10-year Treasury bills fell to 4.21% on Monday from 4.25% on Thursday evening.

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

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

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