(Bloomberg) — Japanese stocks and U.S. futures rose Thursday in a sign of renewed momentum in global stocks after Nvidia Corp. had announced better than expected sales forecast.
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Japanese stocks rallied, helped by the weak yen, sending the Nikkei 225 index just shy of its 1989 record high. South Korean shares also rose, while Australian stocks erased early losses. US futures rose, reversing a small decline in the Nasdaq 100 and fueling a small rise in the S&P 500.
Moves in US futures were boosted by Nvidia results. Shares of the technology company rose as much as 11% in after-hours trading after it said first-quarter revenue was expected to reach $24 billion, above previous estimates of around $22 billion.
Investors in Asia will keep a close eye on chip and AI-related stocks as earnings are expected to be a catalyst for market sentiment. Nvidia's upbeat results supported shares of the chip giant's Asia-based suppliers, as South Korea-listed SK Hynix Inc and Japan's Advantest Corp each rose about 3% in early Thursday trading.
“As Nvidia goes, so does the market,” said Kim Forrest, chief investment officer of Bokeh Capital Partners LLC. “And it looks like the results are good enough. It confirms the statement that AI will continue to be strong for the foreseeable future. This narrative supported markets last year, why shouldn’t it do the same this year?”
Currency markets were mostly stable early Thursday, with the yen mostly trading at just above 150 per dollar.
Government bonds in Asia stabilized after Wednesday's selloff, sending the 10-year yield up five basis points. Selling pressure was felt across the curve and followed a $16 billion sale of 20-year bonds and the release of Federal Reserve meeting minutes that expressed caution about rate cuts. Australian and New Zealand bonds followed the declines.
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Richmond Fed chief Thomas Barkin highlighted ongoing price pressures in sectors such as housing even as overall inflation falls. Fed Governor Michelle Bowman, meanwhile, dismissed the prospect of imminent interest rate cuts.
Investors will turn their attention to China again following further official efforts to support its financial markets. The country has banned large institutional investors from reducing their stock holdings at the beginning and end of each trading day, according to an order from the securities regulator to large asset managers and brokers, according to people familiar with the matter. The regulator has also increased monitoring of short selling.
The Golden Dragon index of U.S.-listed Chinese stocks rose nearly 1% in New York on Wednesday after gains in mainland and Hong Kong stocks.
Elsewhere, shares in Qantas Airways Ltd. recovered. The airline said first-half profit fell as airfares fell following the post-coronavirus surge, as it posted a first-half pre-tax profit of A$1.25 billion, down year-on-year , but below analysts' expectations. The profit of United Overseas Bank Ltd. increased in the fourth quarter due to higher fee income from asset and credit cards.
A busy day for economic reports in Asia includes inflation in Hong Kong, Swift Yuan payments in China, Indonesia's fourth-quarter current account balance and a monetary policy decision in South Korea.
Data due to be released later on Thursday include euro zone inflation and PMIs, as well as initial jobless claims and home sales in the US.
West Texas Intermediate rose 1.1% on Wednesday, helped by tightening physical supply. Gold was steady at around $2,025 an ounce. Bitcoin was little changed after a decline on Wednesday, trading at around $51,350.
Important events this week:
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Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, CPI, Thursday
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US initial jobless claims, US existing home sales, Thursday
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ECB publishes report on January meeting on Thursday
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Fed Governor Lisa Cook and Minneapolis Fed President Neel Kashkari speak Thursday
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Property prices in China, Friday
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Germany IFO business climate, GDP, Friday
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The ECB will publish a survey on 1- and 3-year inflation expectations on Friday
Some of the key moves in the markets:
Shares
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S&P 500 futures rose 0.6% at 9:32 a.m. Tokyo time
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Hang Seng futures fell 0.3%
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Nikkei 225 futures (OSE) up 1%
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Japan's Topix rose 0.7%
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Australia's S&P/ASX 200 fell 0.2%
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Euro Stoxx 50 futures rose 0.5%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0827
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The Japanese yen was little changed at 150.41 per dollar
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The offshore yuan was little changed at 7.1987 per dollar
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The Australian dollar was little changed at $0.6556
Cryptocurrencies
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Bitcoin rose 0.5% to $51,620.63
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Ether rose 0.8% to $2,950.11
Tie up
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The yield on 10-year government bonds remained little changed at 4.32%
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Japan's 10-year yield was little changed at 0.725%
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Australia's 10-year yield rose four basis points to 4.21%
raw materials
This story was produced with support from Bloomberg Automation.
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