Asian Markets Mostly Rise on AI Optimism, Despite Geopolitical Tensions
Investor interest in technology buoyed Asian shares, while U.S. markets saw a mixed performance.
Asian shares experienced a general upward trend in Thursday trading, driven by investor enthusiasm for technology and artificial intelligence (AI), even as concerns persisted over geopolitical instability, particularly in Iran.
In Tokyo, Japan's Nikkei 225 index surged by 3.3%, closing at 68,956.72. South Korea's Kospi also saw gains, edging up 2.0% to 6,971.35. However, Australia's S&P/ASX 200 index declined by nearly 2.0%, settling at 8,614.40. Markets in Hong Kong and Shanghai were closed for a national holiday.
Companies in Tokyo expected to benefit from strong demand in computer chips and AI-related growth, including Advantest Corp., Tokyo Electron, and SoftBank Group Corp., all finished higher. This reflects a broader market optimism surrounding the AI sector.
Across the Pacific, U.S. stocks exhibited a more mixed performance on Wednesday. The S&P 500 index dipped 0.3%, marking its third losing month in the past four. The Dow Jones Industrial Average fell 443 points, or 0.9%, while the Nasdaq composite managed a modest gain of 0.2%.
Recent economic data from the U.S. indicated that inflation might not be as severe as initially feared. Consumer prices were reported to be 3.4% higher in August compared to the previous year, a figure lower than the 3.7% anticipated by economists, although still above the Federal Reserve's 2% target.
Energy markets saw oil prices fluctuate. Benchmark U.S. crude oil prices added 0.12% to $90.53 per barrel, and international standard Brent crude rose 0.32% to $98.34 per barrel. These movements occur amidst uncertainty regarding the impact of the conflict in Iran on crude oil supply.
Reports on Wednesday indicated that Iranian officials had received an official U.S. response to Tehran’s latest proposal aimed at ending the seven-month war. The content of the response and its acceptance status remain undisclosed. Earlier, U.S. President Donald Trump had publicly rejected Iran's proposal to reopen the Strait of Hormuz under certain conditions.
The bond market showed an increase in yields. The 10-year Treasury yield rose to 5.29% from 5.26%, reaching levels not seen in over two decades. The 30-year Treasury yield climbed to 5.64% from 5.59%, reflecting expectations for future inflation and economic growth.
In currency trading, the U.S. dollar strengthened against the Japanese yen, trading at 158.30 yen, up from 157.33 yen. The euro weakened slightly against the dollar, costing $1.1320, down from $1.1334.