(Bloomberg) — Asian stocks extended gains Friday, fueled by the global rally in equities that’s seen markets from the US to Europe and Japan hit all-time highs.
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Shares in mainland China, Hong Kong, Australia and South Korea all advanced. Japanese markets are closed 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 capitalization on Thursday was the biggest single-session increase in value ever — eclipsing a $197 billion gain made 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.”
Markets shrugged off indications that China’s economic slowdown is getting entrenched. There are no signs of a pick-up in the struggling housing market, with data published 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% 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 capitalization 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.
Companies such as Amazon.com Inc., Meta Platforms, Microsoft Corp. and Alphabet Inc.’s Google are Nvidia’s largest customers — accounting for nearly 40% of its revenue, — as they rush to invest in hardware for AI computing.
“Demand for AI is surging worldwide across companies, industries and nations,” said Tom Hulick at Strategy Asset Managers. “We own NVDA and continue to hold the company. This is an exciting momentum play that we have been promoting and participating with for a few years now.”
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.
Key Events This Week:
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Germany IFO business climate, GDP, Friday
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ECB publishes 1- and 3-Year inflation expectations survey, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 10:43 a.m. Tokyo time
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Australia’s S&P/ASX 200 rose 0.6%
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Hong Kong’s Hang Seng rose 0.5%
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The Shanghai Composite rose 0.4%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0828
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The Japanese yen was little changed at 150.46 per dollar
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The offshore yuan was little changed at 7.2008 per dollar
Cryptocurrencies
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Bitcoin fell 0.3% to $51,480.13
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Ether was little changed at $2,984.23
Bonds
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The yield on 10-year Treasuries was little changed at 4.32%
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Japan’s 10-year yield was little changed at 0.715%
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Australia’s 10-year yield was little changed at 4.17%
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rita Nazareth.
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