Asian Shares Rebound Broadly After Two-Day Tumble: Markets Wrap

(Bloomberg) — Asian equities rebounded from their steepest two-day decline since April, as dip buyers returned after a brief pullback in technology shares, driven by concerns about lofty valuations.

MSCI’s regional gauge rose 1.1%, with Hong Kong and Japan among the biggest gainers. All but one of the 11 industry groups in the index advanced, with more than two stocks gaining for every one that fell. Softbank Group Corp. shares advanced 0.9% as it explored a potential takeover of US chipmaker Marvell Technology Inc.

Asian gains came after Wall Street indexes bounced back from Tuesday’s selloff as traders bought the dip on some of the biggest winners of the AI boom. Futures on the S&P 500 and Nasdaq 100 indexes were relatively flat. Qualcomm Inc. shares fell 2.6% in late trading, becoming the latest chipmaker to deliver an upbeat forecast and still leave investors underwhelmed.

“For investors with cash on the sidelines, the recent market pullback seems like a good time to buy, especially for investors with a longer time horizon,” said Robert Edwards at Edwards Asset Management. “Earnings are crushing it and growing faster than revenues, and that often leads to multiple expansion.”

After a brief pullback that stirred concerns about stretched valuations, buyers returned as strong earnings momentum and upbeat private economic data lifted stocks. The shift in sentiment comes after the global equity rally hit a speed bump earlier this week, when Wall Street executives cautioned that lofty valuations could trigger a correction.

Calm prevailed in the US on Wednesday, following a slide that knocked down several of the world’s biggest technology companies.

Concerns about a narrowing cohort of stocks driving equity gains have become louder, while a pivot in Fed commentary has put a dent in optimism over rate cuts. Technical indicators are increasingly flagging reasons for caution just as Wall Street chief executives warn about frothy valuations.

Meanwhile, President Donald Trump’s use of broad powers to impose his signature tariffs faced questions at the apex court, which appeared skeptical of the sweeping global levies. Trump announced the century-high levies in April as part of his economic policy to reshape global trade.

In a nearly three-hour hearing Wednesday, the court hinted it was ready to put significant limits on Trump’s far-reaching agenda for the first time since he took office in January.

“It will certainly have a place in the back of mind for investors,” said Nick Twidale, chief market analyst at AT Global Markets in Sydney. “Until it transfers to any action, I don’t think we will see much of a reaction from markets.”

While the importance of this case and the likelihood of a close split on the court argue for lengthy deliberation, the expedited consideration of the case and likely desire to avoid even larger eventual refunds imply that the court is likely to rule in December or January, Goldman Sachs Group Inc. economists including Alec Phillips wrote in a note.

In other corners of the market, gold held its gains, while oil edged up after three days of losses. Treasuries were steady after gaining in the prior session after the US government signaled larger auction sizes are on the horizon. Also, signs of economic resilience hurt odds of a Federal Reserve interest-rate cut in December.

A Bloomberg gauge of the dollar’s strength extended its losses.

Meanwhile, the number of Chinese companies in MSCI Inc.’s global stock gauges has climbed for the first time in nearly two years, setting up the market for more inflows from passive investors.

More Chinese stocks were added to MSCI’s Global Standard Indexes than deleted in the quarterly shuffle for the first time since February 2024, according to data compiled by Bloomberg. The index provider added 26 Chinese companies and removed 20.

Corporate Highlights:

Arm Holdings Plc, which provides the most widely used technology in computing processors, gave a bullish revenue forecast, helped by increasing interest in designing chips to run AI data centers. DBS Group Holdings Ltd. posted higher-than-expected profit supported by sustained momentum in its wealth management business and robust trading income. James Hardie’s shares were halted in Sydney trading after tumbling as much as 17%. The Australian builder was removed from the MSCI Australia gauge following a review by the index operator. The US said it will cut flight capacity by 10% at 40 high-volume markets across the country, as travelers continue to face flight disruptions due to an uptick in air traffic controller absences during the government shutdown. Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 12:01 p.m. Tokyo time Japan’s Topix rose 1.1% Australia’s S&P/ASX 200 rose 0.3% Hong Kong’s Hang Seng rose 1.5% The Shanghai Composite rose 1% Euro Stoxx 50 futures were little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro rose 0.1% to $1.1505 The Japanese yen rose 0.1% to 153.96 per dollar The offshore yuan was little changed at 7.1279 per dollar Cryptocurrencies

Bitcoin fell 0.3% to $103,375.89 Ether fell 0.6% to $3,422.88 Bonds

The yield on 10-year Treasuries declined one basis point to 4.15% Japan’s 10-year yield advanced one basis point to 1.670% Australia’s 10-year yield advanced five basis points to 4.36% Commodities

West Texas Intermediate crude rose 0.3% to $59.76 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

–With assistance from Joanna Ossinger and Winnie Hsu.

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