Asian stocks experienced an upward trend on Thursday, driven by the positive performance of technology shares. This surge was largely in response to the overnight rally in market darling Nvidia. The CEO of Nvidia, Jensen Huang, emphasized the strong demand for artificial intelligence, which significantly boosted the confidence of investors. The focus was primarily on chipmakers, leading to substantial gains in the technology sector. This positive momentum was also reflected in the Japanese markets, particularly in the Nikkei 225 and TOPIX indexes, which saw a significant rise of between 2% and 3%.
The soft reading on producer inflation in Japan played a crucial role in influencing the market sentiment. This data undermined the hawkish signals from the Bank of Japan regarding potential interest rate hikes. The softer inflation figures indicated that there might be less urgency for the central bank to raise rates, especially given the current economic conditions. The upcoming BOJ meeting is anticipated with uncertainty, as analysts debate the possibility of another rate hike. The comments from BOJ officials regarding the need for higher interest rates to combat inflationary risks further added to the cautious outlook.
The rally in tech stocks, particularly chipmakers, contributed significantly to the positive performance of Asian markets. Companies like TSMC and Nvidia saw substantial gains, fueling optimism about the future of AI demand and tech valuations. This trend was further supported by the rise in suppliers such as SK Hynix Inc and Advantest Corp, who benefited from the positive sentiment towards tech stocks. Even Samsung Electronics reported a 1% increase after news of global job cuts, indicating the resilience of the tech sector.
While technology stocks enjoyed a bullish run, other sectors in Asian markets experienced more subdued gains. Countries like South Korea and Taiwan saw relatively stronger performance, driven by the tech-heavy composition of their markets. However, markets like Australia and India reflected a more moderate increase, suggesting a varied response to the overall market conditions. China, particularly the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes, lagged behind, along with Hong Kong’s Hang Seng index, which operated within a flat-to-low range.
The impact of technology stocks on Asian markets is evident in the recent positive trends. The surge in tech shares, fueled by strong demand for artificial intelligence and positive earnings reports, has played a significant role in boosting investor confidence. However, the overall market performance remains diverse, with sectors outside technology showing mixed results. The upcoming decisions of central banks, particularly the Bank of Japan, will likely influence future market movements. As investors continue to monitor economic indicators and corporate developments, the resilience of the tech sector holds promise for sustained growth in Asian markets.