Asian Shares Climb as Equities Hit Record Highs: Markets Wrap

(Bloomberg) — Asian stocks gained for a second day on 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 fluctuated, while Hong Kong’s Hang Seng Index swung from a rise to a drop. Australian and South Korean equities both 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 recent $197 billion gain 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.”

Hang Seng Mainland Properties Index eked out a fourth day of gains amid the first signs of property-sector improvement for the country in 10 months. China’s home prices declined at a slower pace for both new and existing-units in January, according to data released on Friday.

“The Chinese authorities can’t live with the stock market as weak as this, but it is really is only a trading rebound I think,” said Garry Evans, BCA Research’s chief strategist for global asset allocation. “At the moment, the China’s economy still looks very weak.”

Markets were also parsing indications that China’s economic slowdown is getting entrenched, 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.

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:

Germany IFO business climate, GDP, Friday
ECB publishes 1- and 3-Year inflation expectations survey, Friday

Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 12 p.m. Tokyo time
Australia’s S&P/ASX 200 rose 0.4%
Hong Kong’s Hang Seng fell 0.1%
The Shanghai Composite rose 0.1%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0825
The Japanese yen was little changed at 150.49 per dollar
The offshore yuan was little changed at 7.2070 per dollar

Cryptocurrencies

Bitcoin fell 1.1% to $51,067.81
Ether fell 1.5% to $2,939.43

Bonds

The yield on 10-year Treasuries was little changed at 4.32%
Japan’s 10-year yield was little changed at 0.715%
Australia’s 10-year yield advanced three basis points to 4.19%

Commodities

This story was produced with the assistance of Bloomberg Automation.