Asian Stocks Rally on AI Optimism, Oil Rises: Markets Wrap
(Bloomberg) — Asian stocks climbed as the latest advances in artificial intelligence fueled optimism over accelerating technology investment and stronger semiconductor demand.
MSCI Inc.’s gauge of Asian shares rose 1%, heading for a fifth day of gains. Chipmakers Samsung Electronics Co. and SK Hynix Inc. were among the top contributors to its advance, tracking a rally in Wall Street peers fueled by early signs of success for Meta Platforms Inc.’s new AI agent. South Korea’s benchmark Kospi Index jumped 1.8% while Taiwan’s stock index 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 to compete with Nvidia Corp. and underpin a massive expansion of data center capacity in coming years. Shares of Alibaba and Tencent Holdings Ltd. rallied in Hong Kong.
S&P 500 futures were steady while contracts for the Nasdaq 100 edged up 0.3% after the US indexes capped their best sessions since early August on Monday. Elsewhere in markets, Brent crude rose about 1% to trade around $101 a barrel after falling for four straight sessions.
“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
The latest newsflow helped bolster investor sentiment after recent calls by top AI firms in the US to slow the pace of development had raised concerns about growth in the sector.
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%, Advanced Micro Devices Inc. topped $1 trillion in market value.
Meanwhile, in currencies, the won led gains in Asia on Tuesday while a broad gauge of the dollar was little changed. Bitcoin fell about 1.5%. The cryptocurrency surged more than 7% to climb above $87,000 on Monday as investors rushed back into riskier assets. Markets in Japan remained shut for holidays.
Trump-Xi Summit
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.
A gauge of global stocks was up for a fourth day, heading for its longest winning streak since early August.
“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.”
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 little changed as of 12 p.m. Tokyo time Australia’s S&P/ASX 200 rose 0.2% Hong Kong’s Hang Seng rose 0.6% The Shanghai Composite rose 0.3% Euro Stoxx 50 futures rose 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1469 The Japanese yen was little changed at 157.51 per dollar The offshore yuan was little changed at 6.6966 per dollar Cryptocurrencies
Bitcoin fell 1.4% to $85,720.15 Ether fell 1.6% to $2,740.25 Bonds
Australia’s 10-year yield declined one basis point to 5.27% Commodities
West Texas Intermediate crude rose 0.9% to $96.63 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Ruth Carson, Winnie Hsu and Joe Flynn.
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