Hong Kong (AFP) – Technology firms led gains on a mixed day for Asian stocks Thursday as traders welcomed positive earnings from chip giant Micron. However, concerns about elevated government bond yields and spiking oil prices tempered the optimism, even after a batch of healthy US economic data.
Tokyo and Seoul were the standout markets as chip makers and other leading tech companies rallied after Micron CEO Sanjay Mehrotra announced “record fiscal 2026 results, and we expect an even stronger fiscal 2027.” The news provided a much-needed boost to investors amid lingering worries over the vast sums pumped into the AI sector in recent years, and when — if at all — they will see returns.
“Micron is locking in more of tomorrow’s demand through long-dated customer agreements at the same time it is committing huge sums of capital to build the capacity needed to meet it,” wrote Stephen Innes at SPI Asset Management. Tokyo’s Nikkei ended up more than three percent, with Advantest cruising almost 10 percent higher, Tokyo Electron adding more than six percent and investor SoftBank more than five percent up.
However, Nidec stocks plunged almost 20 percent at one point after the world’s leading manufacturer of small precision electric motors reported a massive impairment loss following a prolonged accounting crisis. It halved its losses by the end of the day.
In Seoul, the Kospi jumped two percent as chip titan SK hynix added 3.2 percent and Samsung piled on 2.8 percent, while Taipei was lifted by a 1.2 percent advance for TSMC. There were also gains in Singapore and Bangkok, though Sydney, Wellington, Manila, Mumbai, and Jakarta fell. London, Paris, and Frankfurt sank at the open. Hong Kong and Shanghai were closed for holidays.
Analysts said traders were presented Wednesday with a “Goldilocks” batch of US figures that led dealers to revise lower the likelihood of a second successive interest rate hike on October 28. The closely watched personal consumption expenditure gauge came in at a below-forecast 3.4 percent, while the Commerce Department revised upwards its estimate for second-quarter economic growth thanks to the artificial intelligence investment boom. Private jobs creation topped expectations. The readings pointed to a healthy economy despite the impact of the Middle East crisis and surging oil prices.
CME’s FedWatch tool put the chances of an increase at less than 40 percent, having priced it at more than 65 percent earlier in the week. “Second-quarter growth was stronger than expected, …the labour market rebounded sharply in September and the Fed’s preferred inflation gauge came in well below expectations,” said Chris Osmond, of Fifth Third Wealth Advisors. “The net effect is broadly supportive of risk assets and materially reduces the probability of an October rate hike.”
However, investors remain concerned about the outlook for borrowing costs, with the US 10-year Treasury yield sitting around its highest level since 2007, and the US 30-year yield at a 24-year high. Elevated oil prices remain a crucial driver of the spike, with the commodity supported by uncertainty in the Middle East, even as Saudi Arabia pumps more fuel through its partially reopened East-West pipeline. Both main contracts rose more than one percent Thursday, extending the previous day’s gains. Brent for December delivery was above $99 a barrel — the November contract closed at more than $103 — while West Texas Intermediate was hovering close to $92.
– Key figures at around 0715 GMT –
Tokyo – Nikkei 225: UP 3.3 percent at 68,956.72 (close)
London – FTSE 100: DOWN 1.6 percent at 10,440.83
Hong Kong – Hang Seng Index: Closed for a holiday
Shanghai – Composite: Closed for a holiday
West Texas Intermediate: UP 1.5 percent at $91.76 per barrel
Brent North Sea Crude: UP 1.5 percent at $99.50 per barrel
Dollar/yen: UP at 158.37 yen from 157.38 yen on Tuesday
Euro/dollar: DOWN at $1.1305 from $1.1325
Pound/dollar: DOWN at $1.3240 from $1.3257
Euro/pound: DOWN at 85.40 pence from 85.41 pence
New York – Dow: DOWN 0.9 percent at 50,906.05 (close)
© 2024 AFP
