Asian markets rally after Wall St tech-led gains
A visitor stands next to an electronic screen displaying Japan's Nikkei stock prices quotation board in Tokyo, Japan on Feb 22, 2024. (File photo: Reuters/Issei Kato)
HONG KONG: Tech firms led gains across Asian equities on Thursday (Feb 19) following a positive lead from Wall Street, where traders also welcomed strong United States data that suggested the world's top economy remained in rude health.
The advances came even as the figures tempered expectations for more interest rate cuts and minutes from the Federal Reserve's January meeting showed policymakers growing concerned about inflation.
Oil prices stabilised after surging more than 4 per cent on Wednesday on fresh US-Iran concerns.
Seoul's Kospi led gains, jumping more than 2 per cent to a record high as it reopened after the Chinese New Year break, with chip giants Samsung and SK hynix once again the standout performers.
Tokyo was also well up as tech firms performed well, while Sydney, Singapore, Wellington, Manila and Jakarta also advanced.
Hong Kong, Shanghai and Taipei were still closed for the Chinese holiday.
Asian stocks are enjoying a strong start to the year as investors turn to the region's relatively cheaper tech plays after Wall Street's AI-fuelled surge over the past two years.
That has seen the Magnificent Seven market titans, including Amazon, Alphabet and Microsoft, struggle since the start of January, with questions being raised about the wisdom of the vast sums splashed on artificial intelligence.
Meanwhile, a slew of strong US figures this week - combined with a forecast-beating jobs report last week - suggested the Fed might not need to cut rates any time soon.
That was compounded by the bank's January minutes that saw several officials open to hiking borrowing costs owing to stubbornly high inflation.
"Industrial production posted its strongest gain in nearly a year. Durable goods surprised to the upside. Housing starts printed a five-month high. This is a reflationary dataset," said Stephen Innes at SPI Asset Management.
"It is an economy that keeps absorbing higher rates like a shock absorber on a heavy freight train, compressing under pressure and then rolling forward with the same relentless momentum.
"The Fed minutes poured cold water on any lingering fantasies of imminent cuts."
Futures traders still saw two reductions this year but were now paring their bets on any being made at all, according to Bloomberg.
Oil prices were flat after Wednesday's surge that came after White House spokeswoman Karoline Leavitt warned Iran would be "wise" to do a deal with the US as Donald Trump once again hinted at military action.
The US president again hinted at a strike on Tehran on his Truth Social site, with a US military buildup underway in the Middle East.
UN nuclear watchdog chief Rafael Grossi said there was a "step forward" in talks between Iran and the US in Geneva but warned "we don't have much time".
Meanwhile, Vice President JD Vance said that while talks were ongoing, it was ultimately up to Trump to decide whether to use force.
"That tacit threat, with a heavy US military presence in the region appears to be keeping tensions in oil markets raised. We may hear little now for a week or two, while Iran formulates its proposals," said National Australia Bank's Gavin Friend.
