HONG KONG: Tech firms led gains across Asian equities on Thursday (Feb 19) following a positive lead from Wall Street, where traders also welcomed strong United States data that suggested the world’s top economy remained in rude health.
The advances came even as the figures tempered expectations for more interest rate cuts and minutes from the Federal Reserve’s January meeting showed policymakers growing concerned about inflation.
Oil prices stabilised after surging more than 4 per cent on Wednesday on fresh US-Iran concerns.
Seoul’s Kospi led gains, jumping more than 2 per cent to a record high as it reopened after the Chinese New Year break, with chip giants Samsung and SK hynix once again the standout performers.
Tokyo was also well up as tech firms performed well, while Sydney, Singapore, Wellington, Manila and Jakarta also advanced.
Hong Kong, Shanghai and Taipei were still closed for the Chinese holiday.
Asian stocks are enjoying a strong start to the year as investors turn to the region’s relatively cheaper tech plays after Wall Street’s AI-fuelled surge over the past two years.
That has seen the Magnificent Seven market titans, including Amazon, Alphabet and Microsoft, struggle since the start of January, with questions being raised about the wisdom of the vast sums splashed on artificial intelligence.
Meanwhile, a slew of strong US figures this week – combined with a forecast-beating jobs report last week – suggested the Fed might not need to cut rates any time soon.
That was compounded by the bank’s January minutes that saw several officials open to hiking borrowing costs owing to stubbornly high inflation.
“Industrial production posted its strongest gain in nearly a year. Durable goods surprised to the upside. Housing starts printed a five-month high. This is a reflationary dataset,” said Stephen Innes at SPI Asset Management.
“It is an economy that keeps absorbing higher rates like a shock absorber on a heavy freight train, compressing under pressure and then rolling forward with the same relentless momentum.
“The Fed minutes poured cold water on any lingering fantasies of imminent cuts.”