Key facts
- Asian stock markets advanced on Monday, driven by a rebound in technology shares.
- South Korea's Kospi index led the gains, rising 3.5%, with significant increases in chipmakers.
- Japan's Nikkei 225 index climbed 1.2%, supported by AI-related companies.
- Last week saw volatility in global equities, particularly in technology stocks, due to concerns over artificial intelligence valuations.
- U.S. economic data has been delayed due to a government shutdown, increasing reliance on corporate earnings reports.
- The Federal Reserve is adopting a cautious stance on interest rate cuts.
Asian stock markets experienced a notable upswing on Monday, with technology shares leading the recovery after a week of jitters related to artificial intelligence valuations. South Korea's Kospi index surged 3.5%, with chipmaker SK Hynix, a partner of Nvidia, jumping 5.5% and its rival Samsung Electronics up 2.4%. Tokyo's Nikkei 225 added 1.2%, boosted by AI-related stocks like Tokyo Electron, which rose 4.7%. The Hang Seng in Hong Kong gained 0.8%, Australia's S&P/ASX 200 was up 0.7%, Taiwan's Taiex jumped 1.2%, and India's Sensex advanced 0.5%.
Last week, Wall Street indexes closed mixed, with the S&P 500 and Dow Jones Industrial Average inching higher while the technology-heavy Nasdaq fell 0.2% after recovering from a larger intraday drop. Major indexes had wobbled throughout the week, weighed down by technology stocks with high valuations, including Alphabet and Broadcom. Investors are scrutinizing quarterly reports and forecasts to determine if the market's overall high value is justified, especially amid a lack of key economic data due to the U.S. government shutdown. This data scarcity is particularly concerning given signs of a weakening job market.
The Federal Reserve has signaled a more cautious approach to interest rate cuts, having already reduced its benchmark rate twice this year. While Wall Street largely expects a rate cut in December, concerns remain about potentially worsening inflation, which is still above the central bank's 2% target. In other markets, U.S. crude oil and Brent crude saw modest gains early Monday, and the U.S. dollar rose against the Japanese yen, while the euro saw a slight increase.