Stocks Rise in Asia After Tech Boosts US Equities: Markets Wrap
(Bloomberg) — Stocks advanced in Asia after a rebound in tech and robust economic data boosted US equities. Oil held gains after its biggest jump since October.
The MSCI Asia Pacific Index climbed as much as 0.6%, led by South Korea whose tech-heavy benchmark rose to a record. The rally came after the S&P 500 rose 0.6% Wednesday and the tech-heavy Nasdaq 100 gained 0.8%. Financial markets remain shut in mainland China, Hong Kong, Taiwan and Vietnam for the Lunar New Year holiday.
The rebound in tech shares offers a sign that concern over the disruption of artificial intelligence were easing, just as several stock pickers surveyed the wreckage for buying opportunities.
“You are seeing that those ability to find growth and opportunity outside of the Mag Seven complex and the AI complex as well, but that’s also on a geographical basis as well,” said Chris Weston, head of research at Pepperstone Group Ltd., said on Bloomberg Television. “We’ve seen big outperformance for a while now from Europe and Japan and Kospi.”
Samsung Electronics Co. shares jumped as much as 4.7% to a fresh record following a newspaper report that the company is negotiating to sell a new generation of ultrafast chips at around $700, or about 20%-to-30% higher than its previous model.
Oil steadied after its biggest daily gain since October, following a report that American military intervention in Iran may come sooner than expected.
Brent held above $70 a barrel after adding 4.3% on Wednesday, while West Texas Intermediate traded near $65. Axios reported that any US military operation would likely be a weeks-long campaign and that Israel’s government is pushing for a scenario targeting regime change in the Islamic Republic.
The dollar edged lower versus most of its Group-of-10 peers after higher Treasury yields had boosted the greenback on Wednesday. Treasuries were little changed in Asia.
Gold was flat, after jumping 2% on Wednesday, with some Asian markets still closed for holidays and traders focused on the Fed’s next move on interest rates.
What Bloomberg strategists say…
“The S&P 500’s proximity to previous all-time highs shows the current rotation within US equity markets — which favors alpha stars like materials — isn’t an indictment of the US economy. It’s simply a reflection of a more discerning market, now that AI capital expenditure has become debt-fueled at a time when inflation jitters are coming back in focus.”
— Ed Harrison, Macro Strategist, Markets Live. For the full analysis, click here.
Economic data published Wednesday showing the biggest increase in US industrial production in January bolstered investor sentiment, while orders for business equipment rose in December by more than projected and housing starts hit a five-month high.
Stock market bulls shrugged off minutes of the Federal Open Market Committee’s January meeting that revealed “several participants” said they would have preferred a post-meeting statement that raised the possibility of raising the federal funds rate “if inflation remains at above-target levels.”
Fed funds futures pricing on Wednesday indicated traders slightly pared bets on rate cuts this year but still expect a further two 25 basis-point reductions in 2026.
“From our perspective, the minutes support our view that rate cuts are off the table for the foreseeable future,” said Charlie Ripley, a fund manager at Allianz Investment Management.
Corporate Highlights:
Mark Zuckerberg testified that it’s “very difficult” to enforce Instagram’s age limits as he sought to defend the platform during a landmark trial over social media addiction. Elliott Investment Management is pressing London Stock Exchange Group Plc to launch a review of its portfolio and pursue a £5 billion ($6.8 billion) share buyback over the next 12 months, according to people familiar with the matter. World Labs, a startup from AI pioneer Fei-Fei Li, raised $1 billion in a new round of funding to pursue a novel approach to AI development. Alphabet Inc. unveiled several new initiatives to support its expansion in India, including new fiber-optic routes that will connect the country with the US and other locations in the Southern Hemisphere. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 11:01 a.m. Tokyo time Nikkei 225 futures (OSE) rose 0.6% Japan’s Topix rose 0.8% Australia’s S&P/ASX 200 rose 1.1% Euro Stoxx 50 futures were little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1794 The Japanese yen fell 0.1% to 154.98 per dollar The offshore yuan was little changed at 6.8939 per dollar Cryptocurrencies
Bitcoin rose 0.7% to $66,789.9 Ether rose 1.3% to $1,966.08 Bonds
The yield on 10-year Treasuries was little changed at 4.09% Japan’s 10-year yield was unchanged at 2.135% Australia’s 10-year yield advanced five basis points to 4.77% Commodities
West Texas Intermediate crude rose 0.2% to $65.30 a barrel Spot gold fell 0.1% to $4,971.59 an ounce This story was produced with the assistance of Bloomberg Automation.
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