Asian Stocks Rally on AI Optimism, Oil Advances: Markets Wrap
(Bloomberg) — Asian stocks climbed as the latest developments in artificial intelligence spurred optimism over accelerating technology investment and stronger semiconductor demand.
MSCI Inc.’s gauge of Asian shares rose 0.9%, heading for a fifth day of gains. Chipmakers Samsung Electronics Co. and SK Hynix Inc. jumped, tracking Monday’s rally in Wall Street peers that was fueled by early signs of success for Meta Platforms Inc.’s new AI agent. South Korea’s Kospi Index advanced 1.5% while Taiwan’s stock benchmark hit an intraday record.
Sentiment toward the tech sector got another boost on Tuesday as Alibaba Group Holding Ltd. said it was rolling out what it calls China’s most powerful AI chip, an accelerator designed to compete with Nvidia Corp. Its shares rallied in Hong Kong alongside those of Tencent Holdings Ltd., which also launched its latest and best image-generation model.
Elsewhere in markets, Brent crude rose about 0.9% to trade above $101 a barrel after falling for four straight sessions. Bitcoin fell about 1.5% after surging more than 7% to climb above $87,000 in the previous session as investors rushed back into riskier assets. S&P 500 futures were steady while contracts for the Nasdaq 100 edged up 0.3%.
“The most meaningful catalyst appears to be the release of Meta’s new AI chatbot, which has been met with strong demand and resurfaced optimism about the growth outlook for the so-called AI trade,” said Kyle Rodda, a senior analyst at Capital.com. “Signs of strong AI demand should improve sentiment throughout the AI ecosystem, especially chips, which ought to filter through to pockets of the Asian tech sector.”
Read: AI Trade Roars Back as Meta’s Personal Agent Fuels Optimism
An index of US semiconductor stocks rallied over 4% on Monday as optimism over Meta’s AI agent revived enthusiasm around demand for the chips needed to power such agents. Meta surged 11% and Advanced Micro Devices Inc. topped $1 trillion in market value. The S&P 500 and the Nasdaq 100 capped their best days since early August.
The latest newsflow helped revive enthusiasm for the AI trade after recent calls by top AI firms in the US to slow the pace of development had raised concerns about growth in the sector. That followed a series of increasingly dire warnings from within the industry that AI is evolving so quickly that it poses a growing threat to national security and the global economy.
“A lot of times over the last year or so, we have seen investors question the strength of this AI rally and the sustainability of it,” said Clive Maguchu, a senior strategist at State Street Investment Management. “Every so often we get news that reinforces the fact that demand is still there.”
Meanwhile, South Korea’s won led gains among Asian currencies on Tuesday while a broad gauge of the dollar was little changed. Markets in Japan remained shut for holidays.
What Bloomberg Strategists say:
“South Korea’s currency will extend its recent ascent as it remains anchored in the AI investment cycle and semiconductor export trade rather than foreign portfolio flows. Renewed confidence in chip demand, as signaled by the rebound in AI-linked shares, reinforces the stance.”
— Andre De Silva, Markets Live strategist. Click here for the full analysis.
Global investors are also gearing up for the summit between US President Donald Trump and Chinese President Xi Jinping. Officials from the two sides wrapped up their second day of talks in New York on Monday to discuss artificial intelligence, investment and trade as they sought to advance negotiations ahead of Xi’s visit to the US this week.
“All eyes will be on the Trump-Xi meeting in Washington on Thursday, with trade, AI and geopolitics seen dominating the agenda,” Roman Ziruk, lead FX strategist at Ebury, wrote in a note. “Given increasing geopolitical uncertainty worldwide, keeping the world’s two dominant economies on speaking terms has rarely mattered more.”
Developments in the Middle East remained firmly in focus as traders assessed whether diplomacy and increased Saudi exports could extend oil’s retreat. Satellite data showed Saudi Arabia’s observed oil loadings from inside the Persian Gulf jumped over the weekend, with the highest number of ships seen at the nation’s main Persian Gulf port since June.
Trump is set to address the United Nations General Assembly in New York later on Tuesday and may meet with his Iranian counterpart, Masoud Pezeshkian, on the sidelines. His administration has also proposed a $5 billion fund to help rebuild critical infrastructure across the Middle East damaged in the ongoing war with Iran.
“In general, markets are actually relatively strong,” Shaun Cochran, head of research at CLSA, said on Bloomberg Television. “What we’re seeing at the moment is this anticipation of this AI revolution that’s driving that confidence in capex. It’s very much a capex-driven economy, and that keeps the risk appetite alive.”
Corporate Highlights:
Radiant World has disclosed $870 million outstanding to six creditors who financed its receivables, according to a spreadsheet included in a legal filing by the embattled commodity trader. Baotou, an industrial city near the Gobi Desert, is the Silicon Valley of rare earths. Off Rare Earth Street, research institutes sit alongside a museum devoted to the minerals. Nearby, JL Mag Rare Earth Co., the world’s top maker of high-performance magnets, is building its largest plant yet — an expansion that offers a glimpse of how China plans to defend its commanding position in the supply chain. Deutsche Bank AG said Chinese inflows to Hong Kong are helping the Asian wealth hub top its private bank’s growth for emerging markets this year, underscoring the strength of the city that recently overtook Switzerland as the world’s largest offshore center. Alphabet Inc.’s Google announced pricing and hardware specifications for the first so-called Googlebooks, marking a push into a high-end laptop market where built-in AI features have become the norm. OpenAI is urging the US to lead an effort with other countries to set standards for cutting-edge artificial intelligence, in response to mounting concerns about the potential harms of the technology. Paramount Skydance Corp. has settled lawsuits brought by 12 state attorneys general and the Writers Guild trade union, a move that will allow the company to close its historic $110 billion acquisition of Warner Bros. Discovery Inc. AMC Entertainment Holdings Inc. is seeking to raise almost $4 billion of debt to overhaul much of its capital structure, seizing on a box-office recovery to lure investors. Some of the main moves in markets:
Stocks
S&P 500 futures were unchanged as of 12:53 p.m. Tokyo time Australia’s S&P/ASX 200 rose 0.2% Hong Kong’s Hang Seng rose 0.4% The Shanghai Composite rose 0.2% Euro Stoxx 50 futures rose 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1473 The Japanese yen was little changed at 157.50 per dollar The offshore yuan was little changed at 6.6952 per dollar The Australian dollar was little changed at $0.7122 Cryptocurrencies
Bitcoin fell 1.7% to $85,468.45 Ether fell 1.8% to $2,732.72 Bonds
Australia’s 10-year yield was little changed at 5.28% Commodities
West Texas Intermediate crude rose 0.9% to $96.65 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Ruth Carson, Winnie Hsu, Joe Flynn and Faseeh Mangi.
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