Asian stocks rise on AI optimism, dollar stabilizes: Market roundup

(Bloomberg) — Asian shares rose on Wednesday after a surge in shares of semiconductor makers helped U.S. stocks hit another record high on Wall Street.

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The MSCI Asia Pacific Index rose about 0.8%, led by shares in semiconductors and artificial intelligence. South Korean and Taiwanese stocks rose 1% and 1.5%, respectively, helped by gains in the two countries' major chipmakers.

Hong Kong shares rebounded, leading a regional rally, but mainland Chinese shares fell as traders digested speeches at the Lujiazui forum featuring China Securities Regulatory Commission Chairman Wu Qing and People's Bank of China Governor Pan Gongsheng.

“Hong Kong stocks are rallying on the back of the Shanghai LJZ forum,” said Billy Leung, investment strategist at Global X ETFs. “There's hope for bank reforms and positive policies on shareholder returns. I think those policies might be more relevant for Hong Kong-listed stocks.”

The Bloomberg dollar index was little changed after a drop on Tuesday. There is no global trading of government bonds on Wednesday due to a U.S. holiday.

The general risk-on mood comes as U.S. traders pushed the S&P 500 closer to the historic 5,500 mark as they bet a possible Federal Reserve interest rate cut will continue to fuel the tech industry. Nvidia has overtaken Microsoft to become the world's most valuable company, continuing its record-breaking surge this year.

“Tech stocks in Taiwan, South Korea and Japan are expected to continue to rally, and this isn't just about Nvidia,” Aisa Ikukoshi, a portfolio manager at JPMorgan Asset Management, said in an interview on Bloomberg TV, adding that Apple's AI plans would also benefit suppliers.

China's 10-year bond yields fluctuated after People's Bank of China Governor Pan said the central bank was working with the finance ministry to explore how to conduct a bond transaction.

China's 10-year government bond futures closed at a record high on Tuesday. The relentless bond bull run has worried Chinese regulators, with the People's Bank of China repeatedly warning in state media about the risks of a market reversal.

In other Asian news, Japan's exports posted their fastest growth since late 2022 as a weaker yen strengthened the value of the currency, which was little changed after four straight trading days of declines.

Japanese government bond futures edged lower after a Bloomberg report said the Finance Ministry was considering plans to shift more of its issuance into shorter-term bills, a big change that would signal the central bank is moving to reduce its bond purchases.

Wall Street pored over mixed economic data overnight that showed U.S. industrial production rose, buoyed by a broad-based recovery in factory production, while retail sales barely grew and were revised down from last month. Federal Reserve officials unanimously stressed that they need more evidence of subdued inflation before cutting interest rates.

“Investors should be optimistic, but also be cognizant of the macroeconomic situation,” said Anthony Sagrimbene of Ameriprise.

In corporate news, Japan's largest agricultural bank, Norinchukin Bank, said it would diversify its investment portfolio to prepare for huge losses from the sale of about 10 trillion yen ($63 billion) of U.S. and European government bonds.

In commodities, crude oil stabilized after closing at a seven-week high as continued risk aversion across markets outweighed signs of rising inventories. Gold was little changed.

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