Hong Kong (AFP) – A surge in tech firms helped Tokyo’s Nikkei lead most Asian equities higher on Friday as investors headed into the weekend on a broadly positive note, with US rate-cut hopes out-muscling concerns about a government shutdown. The rally across world markets this year has largely been fuelled by companies ploughing billions of dollars into all things artificial intelligence, and traders not wanting to miss out on the action. That has helped push the valuations of some of the biggest names to eye-watering levels — with US chip titan Nvidia topping $4 trillion — and several markets to record highs.
This week has seen extra momentum after South Korean semiconductor giants Samsung and SK Hynix said they had struck a preliminary deal with the ChatGPT developer OpenAI to supply chips and other equipment for its Stargate project. And on Friday, it was the turn of Japan’s Hitachi, which said it had joined into a strategic partnership with OpenAI to work on AI and energy, among other things. Hitachi jumped more than 10 percent, while other Japanese tech firms followed suit with Renesas up 7.3 percent, Sony gaining 2.3 percent, and Advantest rising more than four percent. Tech investment giant SoftBank piled on more than three percent.
The advance helped push Tokyo’s Nikkei 1.9 percent higher, while there were also gains in Sydney, Singapore, Bangkok, Wellington, Taipei, Jakarta, and Manila. London, Paris, and Frankfurt all rose in the morning. Hong Kong retreated after jumping more than four percent in the previous three trading days. Shanghai was closed for a holiday.
The rally — which saw all three main Wall Street indexes reach all-time peaks Thursday — has also been stoked by data in recent months pointing to a slowdown in the US labor market. That has led the Federal Reserve to cut borrowing costs and indicate more to come. The positive sentiment has overshadowed the standoff in Washington that has seen the government partially shut down, leading to the closure of some services and the likely delay of the release of key jobs figures later in the day.
While the readings on non-farm payrolls (NFPs) are a major guide for the Fed when deciding monetary policy, analysts said the shutdown was unlikely to deter the bank from an expected second rate cut this month. “The general vibe is that the government shutdown could potentially shave $15–$20 billion off of US GDP, but it will largely be backfilled and therefore should have only a negligible lasting impact on economic activity,” said Pepperstone’s Chris Weston. “That said, there are reasons to think Trump’s threat to permanently furlough certain government workers could spill over into more of a market risk event.”
Still, he added that the US government could still “reopen in time for the NFP and possibly even the (consumer price) reports to be released” before the next Fed policy meeting on October 29. A Senate vote is expected Friday on a House-passed resolution to keep the government funded at current levels through November 21.
In company news, Japanese beer titan Asahi fell more than one percent after a cyberattack that hit its ordering and delivery system this week forced it to stop production at some factories. Its shares have fallen around seven percent this week. Officials at the firm said they did not know when they would be back up and running.
The positive mood on trading floors has also helped bitcoin regain some of its mojo, striking back above $120,000 for the first time since mid-August when it hit a record 124,515.
– Key figures at around 0810 GMT –
Tokyo – Nikkei 225: UP 1.9 percent at 45,769.50 (close)
Hong Kong – Hang Seng Index: DOWN 0.5 percent at 27,140.92 (close)
London – FTSE 100: UP 0.4 percent at 9,464.95
Shanghai – Composite: Closed for a holiday
Euro/dollar: UP at $1.1735 from $1.1720 on Thursday
Pound/dollar: UP at $1.3463 from $1.3446
Dollar/yen: UP at 147.41 yen from 147.19 yen
Euro/pound: UP at 87.19 pence from 87.17 pence
West Texas Intermediate: UP 0.9 percent at $61.01 per barrel
Brent North Sea Crude: UP 0.8 percent at $64.61 per barrel
New York – Dow: UP 0.2 percent at 46,519.72 (close)
© 2024 AFP
