Asian stocks extended their rally on Wednesday, with South Korean and Taiwanese shares gaining as renewed demand for artificial intelligence applications lifted technology stocks, while oil prices eased on signs of increased Middle Eastern supply.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7%, putting it on course for a sixth straight session of gains. South Korea’s Kospi advanced 1.2%, with Samsung Electronics and SK Hynix both rising more than 2%, while Taiwan’s benchmark gained 0.9% and moved closer to a record high.
The technology rally has been supported by strong consumer demand for AI applications. Meta’s Muse AI agent has topped US app download charts over the past two weeks, while investors are watching to see whether a similar product from Google Labs can attract consumers.
Oil prices, meanwhile, remained under pressure after Saudi Arabia restarted operations on its East-West Pipeline and may have resumed exports from the Red Sea port of Yanbu.
Brent crude fell 0.1% to US$99.18 a barrel while US crude slipped 0.4% to US$90.14. Hopes of progress in US-Iran talks also weighed on prices, although US President Donald Trump later threatened to “annihilate” Iran if no deal was reached.
Chinese blue chips were little changed ahead of President Xi Jinping’s arrival in Washington for talks with Trump, with markets watching for a possible extension of the US-China trade truce and potential cooperation on AI.
Japanese markets were closed for a holiday, although Nikkei futures were trading at 66,745, nearly 2,000 points above Friday’s cash close.
“We expect a strong reopening in Japan tomorrow, with another move lower in crude, calm conditions in rates and Treasuries, and the Nasdaq cash and futures markets printing all-time highs,” said Chris Weston, head of research at Pepperstone.
“Memory stocks have taken the leadership baton, backed by another strong session for semi’s, which have recorded a sixth consecutive day of gains.”
US equity futures were largely steady, while European futures were higher. EUROSTOXX 50 and DAX futures gained 0.3% while FTSE futures added 0.2%.
Lower oil prices helped Treasury futures edge higher, keeping 10-year US Treasury yields below 5%. However, two-year yields climbed to 4.7879%, their highest since mid-2024, as investors priced in the possibility of further Federal Reserve rate hikes.
Richmond Fed President Tom Barkin and Boston Fed President Susan Collins backed last week’s rate increase, citing continued inflation concerns. Markets are pricing in a 54% chance of another hike in October and 33 basis points of tightening by the end of the year.
The prospect of higher US rates kept the dollar near multi-week highs against the euro, sterling and Canadian dollar. The euro was at US$1.1440, close to a two-month low, while the dollar traded at 157.60 yen.
Gold fell 0.3% to US$4,341 an ounce, while copper remained close to record highs after gaining 18% so far this year.
Reuters
