Asian stock markets surged to fresh highs on Thursday, buoyed by renewed investor enthusiasm for artificial intelligence (AI) and upbeat earnings expectations, while oil prices retreated after Israel and Hamas agreed to the first phase of a Gaza ceasefire plan.
The regional rally followed record closes on Wall Street, where the S&P 500 and Nasdaq both hit all-time highs, driven by gains in AI-related technology stocks. Analysts at JPMorgan said investor appetite for AI continued to power markets, with “another stream of multi-billion-dollar investment” flowing into the sector.
“The AI theme remains intact,” the analysts wrote, noting that estimated earnings growth for the tech sector has jumped to 20.9% for the upcoming reporting season, up from 15.9% in June.
Tech giants including Nvidia and Apple led the charge, with 81% of technology stocks seeing earnings upgrades. Overall, third-quarter earnings are projected to rise 8%, with revenue up 6.3%.
Japan’s Nikkei index climbed 1.5%, nearing record peaks, as data showed offshore investors bought a net 2.5 trillion yen ($16.4 billion) in Japanese equities during the week ending October 4.
Taiwan’s benchmark index rose 1.2% to an all-time high, while China’s blue-chip CSI300 index gained 0.4% as markets reopened from a week-long holiday.
China reported robust domestic spending during the Golden Week holiday, with consumers splurging 809 billion yuan ($113.5 billion) and taking 888 million trips.
However, Beijing also announced new export restrictions on rare earth minerals and related equipment, a move that could further strain trade relations with the United States.
Meanwhile, oil prices fell as geopolitical tensions eased following the Gaza ceasefire announcement. Brent crude dropped 0.6% to $65.89 a barrel, and U.S. West Texas Intermediate crude slipped 0.7% to $62.12. U.S. President Donald Trump said he might travel to Egypt this weekend to discuss the next steps in the peace process.
Gold prices held firm at $4,037 an ounce, up 3.9% for the week, supported by expectations of U.S. interest rate cuts and strong central bank demand. Investors have also turned to gold as a hedge against potential declines in the U.S. dollar and rising government debt levels.
In bond markets, U.S. 10-year Treasury yields edged down to 4.115%, as traders maintained bets on further Federal Reserve easing. Futures implied a 94% chance of another quarter-point rate cut in November, with around 44 basis points of total cuts expected by year-end.
“While most Fed officials want to cut further, some participants are urging caution,” Citi economists said, adding they expect the Fed to lower rates at each of its next four meetings if labor market weakness continues.
The U.S. dollar held near eight-month highs against the yen at 152.54 and steadied against the euro at $1.1641 after weak German industrial data added pressure on the eurozone economy.
With risk appetite surging, investors appeared willing to overlook geopolitical uncertainties, at least for now, as the AI boom continued to propel global equities to new heights.
Source: Reuters
Written By Rodney Mbua
