- Asian stocks will win the ground as the soft US PPI data farm filed a Fed rate cut in September.
- Oracle predicts that AI will drive demand for cloud services and lift AI-related stocks in Asia.
- The Nikkei 225 is supported by exports to accelerate to the US ahead of the new 15% tariff.
Asian stocks rose Thursday, driven by strong forecasts from US Producer Price Index (PPI) data and Oracle, following the ongoing rallies on Wall Street. Traders are currently waiting for the US Consumer Price Index (CPI) during the day, potentially strengthening expectations for a massive 50-point tax cut next week.
Japan's Japan 225 rose 0.66% with nearly 44,100 transactions at the time of writing, while South Korea's Cospi advances 0.40% to over 3,300, while Hong Kong's Hangsen stabilizes nearly 26,200. Furthermore, China's Shanghai composite reached 1.05% to 3,850, while the deep Shenzhen components rose by 2.60% to nearly 12,900.
The Asian market rose as tech stocks progressed, boosted by Oracle's forecast that AI would drive demand for cloud services. The momentum lifted AI-related stocks across the region after Oracle surged 36%, followed by Softbank's 36% increase in its largest daily profit since 1992, bringing the 48-year-old company to a valuation of nearly $1 trillion per Reuters.
Nikkei 225 received support after the survey showed improvements in business sentiment in Japan in the third quarter.
The Chinese market, including Hansen's rebound, will rebound towards a four-year high as deflationary pressure remains on China. Additionally, consumer prices in August recorded the sharpest decline since February, with producer prices signing for 35 months. Surges in Shanghai's composites and Shenzhen components have skyrocketed as Chinese technology stocks gathered in AI optimism.
South Korea's Kospi will expand profits to new record highs led by large technology and semiconductor inventory tracking AI fuel rally on Wall Street. Hanwha Aerospace rose 3.31%, SK Hynix increased 1.97%, and Samsung Electronics spiked 0.41% at the time of writing.
AsianStocks FAQ
Asia contributes to around 70% of global economic growth and hosts several major stock market indexes. Among the developed countries in the region, Japan's Sundays and Korean Cospi, representing 225 companies on the Tokyo Stock Exchange, stand out. China has three important indicators: Hong Kong Hangsen, Shanghai composite material, Shenzhen comprehensive material. As a big emerging economy, Indian stocks are also attracting attention from investors increasingly investing in companies with Sensex and clever indexes.
Asia's major economies are different, with each one having a particular sector to pay attention to. Technology companies are increasingly dominating the indexes of Japan, Korea and China. Financial Services is a major stock market in Hong Kong and Singapore, and is considered a key hub for the sector. The manufacturing industry is also large in China and Japan, with an emphasis on automobile production and electronic equipment. The growth of middle class in countries such as China and India is increasingly attracting attention for companies focused on retail and e-commerce.
While many different factors drive the index of Asian stock markets, the main factor behind performance is the aggregation of component companies revealed in quarterly and annual revenue reports. The economic foundations of each country, as well as central bank decisions or government fiscal policies, are also important factors. More broadly, political stability, technological advancements, or the rule of law can also affect the stock market. The performance of US stock indexes is also a factor. This is often because the Asian market is leading overnight from Wall Street stocks. Finally, broader risk sentiment in the market also plays a role as stocks are considered risky investments compared to other investment options such as fixed income securities.
Investing in stocks is risky in itself, but investing in Asian stocks comes with the region-specific risks that are considered. Asian countries have a wide range of political systems, from full democracy to dictatorships, which can diverge significantly in the requirements of political stability, transparency, the rule of law, or corporate governance. Geopolitical events such as trade and territorial disputes can lead to stock market volatility, just like natural disasters. Furthermore, currency fluctuations can also affect the valuation of Asian stock markets. This is especially true in export-oriented economies. This tends to suffer from stronger currencies and benefit from weaker currencies as products become cheaper overseas.
