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Asian shares climb as equities hit record highs: markets wrap

Asian shares climb as equities hit record highs: markets wrap
An Iranian national flag flies near gas condensate processing facilities in the new Phase 3 facility at the Persian Gulf Star Co refinery in Bandar Abbas, Iran, on Wednesday, Jan. 9. 2019. (Photo: Ali Mohammadi/Bloomberg)

Asian stocks gained for a second day on Friday, fuelled by the global rally in equities that’s seen markets from the US to Europe and Japan hit all-time highs. 

Shares in mainland China fluctuated, while Hong Kong’s Hang Seng Index swung from a rise to a drop. Australian and South Korean equities both advanced. Japanese markets are closed on Friday for a public holiday. 

The bullish mood built on gains overnight in the US, where the S&P 500 and Nasdaq 100 indexes closed at new records. A buoyant outlook for Nvidia Corp., the most valuable chipmaker, helped it surge 16% amid artificial-intelligence mania, while fresh data showed the world’s largest economy is still going strong.

Nvidia’s $277-billion one-day boost to its market capitalisation on Thursday was the biggest single-session increase in value ever — eclipsing a recent $197-billion gain by Meta Platforms Inc. 

“The major catalyst for markets, absent rate cuts throughout the year, would by necessity be earnings, and here Nvidia wowed investors and traders alike,” said Quincy Krosby, chief global strategist for LPL Financial. “It was clear from their top down, and straight to the bottom line, that demand for AI infrastructure is growing exponentially.”

Hang Seng Mainland Properties Index eked out a fourth day of gains amid the first signs of property-sector improvement for the country in 10 months. China’s home prices declined at a slower pace for both new and existing-units in January, according to data released on Friday. 

“The Chinese authorities can’t live with the stock market as weak as this, but it really is only a trading rebound I think,” said Garry Evans, BCA Research’s chief strategist for global asset allocation. “At the moment, China’s economy still looks very weak.”

Markets were also parsing indications that China’s economic slowdown is getting entrenched, with data published on Thursday showing the number of foreclosed properties for sale in China rose at a faster pace in January.

Back in the US, traders took more hawkish Fed commentary in stride. Treasury 10-year yields were little changed at 4.32% on Thursday. Trading in cash Treasuries is closed in Asia Friday due to the Japanese holiday.

“At some point, as we gain greater confidence that disinflation is ongoing and sustainable, that changing outlook will warrant a change in the policy rate,” Federal Reserve governor Lisa Cook said at an event at Princeton University.

AI computing boom

Nvidia’s market capitalisation has now increased by more than $700-billion this year — with its value now topping $1.9-trillion — as investors bet that the company will remain the prime beneficiary of an AI computing boom.

The tech rally has propelled the valuation of the Nasdaq 100 to an elevated level versus history, with a similar picture for the S&P 500. Lofty valuations could ultimately curb more gains as investors weigh how much they’re willing to pay for stocks valued on future growth.

In commodities, oil slipped as investors weighed signs of a tightening market against persistent concerns around demand. Gold fluctuated after the US economic data and Fed minutes which indicated policymakers are content with leaving rates higher for longer if needed.


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