Hong Kong (AFP) – Tech firms rallied on a mixed day for Asian stocks Monday, with traders gearing up for a crucial week of events culminating in US inflation data that could determine the Federal Reserve’s decision on interest rates. The gains — led by chipmakers in Seoul and Tokyo — came even after a forecast-busting reading on US jobs Friday that ramped up bets the central bank will tighten monetary policy on September 16.
A fresh bout of tit-for-tat US-Iran strikes at the weekend pushed oil higher and added upward pressure to inflation expectations. After July’s rout of AI-linked firms, dealers have been edging back into the sector, confident that the vast sums invested in recent years will pay off — despite concerns about elevated valuations. The latest boost came after ChatGPT-maker OpenAI said last week it would begin rolling out its newest and most powerful artificial intelligence model to select customers, saying it had built in safeguards to mitigate security risks. The firm sees GPT-6, also known as Astra, as a crucial part of a decade-long push towards artificial general intelligence — tools as clever as humans.
Investors are also looking forward to the release of earnings from tech titan Oracle on Thursday. The release will be pored over for a fresh idea about the outlook for the AI boom. South Korea’s Samsung added 5.7 percent and SK hynix 8.3 percent, while Kioxia, Tokyo Electron and Advantest rallied between four and 9.3 percent in Japan. Tech investment giant SoftBank soared more than 11 percent.
On broader markets, Seoul ended more than four percent higher and Tokyo added more than two percent, with Taipei up 1.7 percent thanks to a spike in chipmaker TSMC. There were also gains in Shanghai, Sydney and Bangkok. However, Hong Kong, Singapore, Wellington, Manila, Jakarta and Mumbai fell. London, Frankfurt and Paris all fell in the morning.
“Markets may look calm on the surface, but the combination of central-bank meetings, US inflation, Oracle earnings and flows in China tech suggests the conditions for a more meaningful expansion in volatility are building as the week progresses,” said Chris Weston at Pepperstone. Friday’s release of the US consumer price index for August is seen as critical in deciding whether the Fed hikes rates next week or stands put. The CME Group’s FedWatch tool put the chances of an increase at more than 56 percent after figures Friday showed the US economy created far more jobs than expected in August.
Elias Haddad, at Brown Brothers Harriman, said: “A September 16 Fed funds rate hike hinges on Friday’s US August CPI print.” A hot CPI print would all but seal a September hike and underpin a firmer US dollar. A cooler reading would strengthen the case for a hold.
While data put pressure on the Fed to lift rates, the yen held last week’s healthy gains against the dollar amid speculation the Bank of Japan will hike borrowing costs at each of its next two meetings. The likelihood that rates will rise has seen yields on government bonds around the world rise, and comes as the Middle East war continues with no sign of ending. Iran’s top negotiator threatened Sunday a more forceful response to any further US attacks following strikes on American warships in their latest round of clashes. The exchanges of fire, which began with US raids last week, come amid a deadlock in the six-month conflict.
– Key figures at around 0810 GMT –
Tokyo – Nikkei 225: UP 2.1 percent at 66,399.84 (close)
Hong Kong – Hang Seng Index: DOWN 0.9 percent at 25,413.12 (close)
Shanghai – Composite: UP 0.1 percent at 3,932.70 (close)
London – FTSE 100: DOWN 0.3 percent at 10,801.25
Dollar/yen: DOWN at 155.55 yen from 156.26 yen on Friday
Euro/dollar: UP at $1.1623 from $1.1613
Pound/dollar: UP at $1.3532 from $1.3516
Euro/pound: DOWN at 85.88 pence from 85.92 pence
West Texas Intermediate: UP 0.4 percent at $91.87 per barrel
Brent North Sea Crude: UP 0.9 percent at $97.10 per barrel
New York – Dow: DOWN 0.5 percent at 53,414.25 (close)
© 2024 AFP
