(May 22): Asian stocks rose for a second day on Friday to head for a weekly advance as investors rotated into a broader set of companies tied to the artificial intelligence (AI) build-out.
MSCI’s Asian equities gauge climbed 0.8%, with Japan’s Nikkei leading regional gains with a 2.7% rally. SoftBank Group Corp surged 13% in Tokyo, following gains in US-listed shares of chipmaking unit Arm Holdings plc. Lenovo Group Ltd climbed to a 26-year high in Hong Kong after reporting strong growth in AI-related earnings.
US equity-index futures also edged up, with contracts on the Nasdaq 100 Index rising 0.4%. European shares were also primed to advance.
Still, caution over geopolitics kept gains in check. Brent rebounded after three days of declines to rise above US$104 ($133) a barrel, as statements by Iran on uranium and the Strait of Hormuz pared earlier optimism over progress in the negotiations with the US.
Technology shares have surged this year as investors poured into companies viewed as critical suppliers to the global AI expansion. The momentum has helped markets look past the conflict in the Middle East, lifting equities to record highs.
See also: Stocks rise on best Asian tech rally in six weeks
Stock traders are now also chasing a wider array of beneficiaries as mainstream usage of AI creates demand for hardware beyond the most-advanced chips that companies such as Taiwan Semiconductor Manufacturing Co (TSMC) make for Nvidia Corp. Themes emerging from an intensifying memory crunch and advances in robotics are also luring bids.
“It is a very very exciting time,” Jonathan Curtis, an equity portfolio manager at Franklin Templeton, said on Bloomberg TV. “We are bullish very broadly on the category and we do not think markets are pricing in what happens downstream,” he said, adding that when companies start applying the AI technology into their business, it will allow them to develop better outcomes.
Elsewhere, gold edged lower to about US$4,530 an ounce. The yen hovered around the 159 level against the dollar, near its weakest level since April 30, as Japan’s key inflation gauge slowed by more than forecast.
See also: Stocks decline on inflation fear after bonds slump
Yen traders will be closely watching trading after Tokyo hours, where a lack of participants could exacerbate exchange-rate moves. They are also on alert for the risk of intervention on Monday, when holidays from London to New York are expected to reduce market liquidity.
In more geopolitical news, Iran said the latest proposal from the US partly bridged the gap between the warring sides, but comments from the Islamic Republic’s supreme leader about keeping Tehran’s uranium stockpile and a dispute over tolls in the Strait of Hormuz clouded the outlook for a breakthrough.
US Secretary of State Marco Rubio said there were “some good signs” that a deal with Iran could be reached, adding that he expects Pakistani mediators to travel to Tehran, according to the Financial Times. Meantime, Iranian President Masoud Pezeshkian said “we will never back down” in talks.
“We will need to continue watching this space closely, but it increasingly feels as though the news flow is gradually trending towards something tangible that markets can ultimately price with greater conviction,” wrote Chris Weston, the head of research at Pepperstone Group.
Corporate highlights:
- Estee Lauder Cos and Spanish company Puig Brands SA have walked away from a multibillion-dollar deal that would have created one of the world’s largest beauty businesses.
- DeepSeek’s senior management has told potential investors in its ongoing 70 billion yuan (US$10.0 billion or $13.2 billion) funding round that the start-up will prioritise groundbreaking AI research over short-term commercialisation, people familiar with the matter said.
- The Capital Group has been increasing its exposure to Adani Group companies while steadily paring holdings in Reliance Industries Ltd, marking a shift in foreign investor preference between India’s biggest conglomerates.
- Nintendo Co has asked partners and suppliers to assemble about 20 million Switch 2 consoles in the year through March, roughly 20% more than the public sales outlook it issued earlier this month, people familiar with the matter said.
Some of the main moves in markets:
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Stocks
- S&P 500 futures were up 0.3% as of 12.55pm Tokyo time on Friday
- Nikkei 225 futures (OSE) rose 3%
- Japan’s Topix rose 1.2%
- Australia’s S&P/ASX 200 rose 0.5%
- Hong Kong’s Hang Seng rose 1.3%
- The Shanghai Composite rose 0.5%
- Euro Stoxx 50 futures rose 0.9%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at US$1.1611
- The Japanese yen was little changed at 159.04 per dollar
- The offshore yuan was little changed at 6.8009 per dollar
Cryptocurrencies
- Bitcoin was little changed at US$77,707.2
- Ether was little changed at US$2,136.68
Bonds
- The yield on 10-year Treasuries was little changed at 4.57%
- Japan’s 10-year yield advanced 2.5 basis points to 2.785%
- Australia’s 10-year yield declined five basis points to 4.92%
Commodities
- West Texas Intermediate crude rose 1.2% to US$97.50 a barrel
- Spot gold fell 0.3% to US$4,527.69 an ounce
Uploaded by Tham Yek Lee
