Asian markets mixed as tech rebounds, oil rises and US inflation takes centre stage
HONG KONG, Sept 7 — Tech firms rallied on a mixed day for Asian stocks today, with traders gearing up for a crucial week of events culminating in US inflation data that could determine the Federal Reserve’s decision on interest rates.
The gains — led by chipmakers in Seoul and Tokyo — came even after a forecast-busting reading on US jobs Friday that ramped up bets the central bank will tighten monetary policy on September 16.
A fresh bout of tit-for-tat US-Iran strikes at the weekend pushed oil higher and added upward pressure to inflation expectations.
After July’s rout of AI-linked firms, dealers have been edging back into the sector, confident that the vast sums invested in recent years will pay off — despite concerns about elevated valuations.
The latest boost came after ChatGPT-maker OpenAI said last week it would begin rolling out its newest and most powerful artificial intelligence model to select customers, saying it had built in safeguards to mitigate security risks.
The firm sees GPT-6, also known as Astra, as a crucial part of a decade-long push towards artificial general intelligence — tools as clever as humans.
Investors are also looking forward to the release of earnings from tech titan Oracle on Thursday. The release will be pored over for a fresh idea about the outlook for the AI boom.
South Korea’s Samsung and SK hynix soared four and six per cent respectively, while Kioxia, Tokyo Electron and Advantest rallied between five and 7.5 per cent in Japan.
On broader markets, Seoul was more than three per cent higher and Tokyo added more than two per cent, with Taipei up more than one per cent thanks to a spike in chipmaker TSMC. There were also gains in Sydney and Jakarta.
However, Hong Kong, Singapore, Wellington and Manila fell, while Shanghai was flat.
“Markets may look calm on the surface, but the combination of central-bank meetings, US inflation, Oracle earnings and flows in China tech suggests the conditions for a more meaningful expansion in volatility are building as the week progresses,” said Chris Weston at Pepperstone.
Friday’s release of the US consumer price index for August is seen as critical in deciding whether the Fed hikes rates next week or stands put.
The CME Group’s FedWatch tool put the chances of an increase at more than 56 per cent after figures Friday showed the US economy created far more jobs than expected in August.
Elias Haddad, at Brown Brothers Harriman, said: “A September 16 Fed funds rate hike hinges on Friday’s US August CPI print.
“A hot CPI print would all but seal a September hike and underpin a firmer US dollar. A cooler reading would strengthen the case for a hold.”
While data put pressure on the Fed to lift rates, the yen held last week’s healthy gains against the dollar amid speculation the Bank of Japan will hike borrowing costs at each of its next two meetings.
The likelihood that rates will rise has seen yields on government bonds around the world rise, and comes as the Middle East war continues with no sign of ending.
Iran’s top negotiator threatened Sunday a more forceful response to any further US attacks following strikes on American warships in their latest round of clashes.
The exchanges of fire, which began with US raids last week, come amid a deadlock in the six-month conflict.
The spike in oil prices sent US diesel prices to a record high of US$5.85 a gallon last week.
Key figures at around 0300 GMT
Tokyo — Nikkei 225: UP 2.2 per cent at 66,460.11 (break)
Hong Kong — Hang Seng Index: DOWN 0.9 per cent at 25,409.58
Shanghai — Composite: FLAT at 3,929.49
Dollar/yen: DOWN at 156.00 yen from 156.26 yen on Friday
Euro/dollar: UP at US$1.1615 from US$1.1613
Pound/dollar: DOWN at US$1.3512 from US$1.3516
Euro/pound: UP at 85.96 pence from 85.92 pence
West Texas Intermediate: UP 0.5 per cent at US$91.93 per barrel
Brent North Sea Crude: UP 0.3 per cent at US$96.61 per barrel
New York — Dow: DOWN 0.5 per cent at 53,414.25 (close)
London — FTSE 100: FLAT at 10,831.09 (close).
