Asia-Pacific shares climb after Wall Street’s tech rebound driven by Alphabet

Equity markets across the Asia-Pacific region moved higher in early trading on Tuesday, mirroring Monday’s sharp advance in U.S. technology stocks that followed renewed enthusiasm for artificial-intelligence plays and expectations of a potential policy shift by the Federal Reserve.

Alphabet’s 6.31% surge on Monday, prompted by last week’s unveiling of its updated AI model Gemini 3, set the tone for a broader rally in semiconductor and software names. Gains in other AI-linked stocks such as Broadcom and Micron Technology reinforced the positive momentum that began on Friday, when the president of the New York Federal Reserve signaled that a reduction in interest rates could still be considered at the December meeting.

Stronger tone in Tokyo and Seoul

Japan’s benchmark Nikkei 225 advanced 1.14% shortly after the opening bell, while the broader Topix index added 0.7%. Semiconductor testing specialist Advantest led the early gainers, rising 4.8%. Chip-equipment makers Lasertec and Tokyo Electron, both seen as beneficiaries of rising demand for advanced processors used in AI applications, increased 2.75% and 2.39%, respectively.

In South Korea, the large-cap Kospi jumped 2.39% and the tech-focused Kosdaq climbed 1.7%. Memory-chip producer SK Hynix traded up about 5%, while consumer-electronics giant Samsung Electronics gained roughly 4%. Analysts noted that the sector’s outperformance reflected optimism that global demand for high-performance chips will remain robust throughout 2024.

Mixed but firmer moves elsewhere

Australia’s S&P/ASX 200 wiped out its early advance but stayed marginally above the flat line as investors assessed the sustainability of the recent rally in commodity prices against still-elevated domestic bond yields.

Hong Kong’s Hang Seng Index rose 1%, and the Hang Seng Tech gauge, which tracks leading Chinese technology firms listed in the city, moved up 1.74%. On the mainland, the blue-chip CSI 300 gained 0.53%, keeping pace with the regional uptick despite the absence of major policy headlines out of Beijing.

Wall Street backdrop

Monday’s advance on Wall Street provided the primary catalyst for Asia’s positive start. The S&P 500 closed 1.55% higher at 6,705.12, while the Nasdaq Composite jumped 2.69% to 22,872.01, marking the technology-heavy index’s best single-day performance since May 12, when it rallied 4.35%. The Dow Jones Industrial Average added 202.86 points, or 0.44%, to finish at 46,448.27.

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Alphabet’s strength rippled through the broader technology complex after its Gemini 3 announcement reassured investors that the company remains a formidable competitor in the AI space. Shares of semiconductor suppliers and cloud-infrastructure providers also moved higher, reinforcing hopes that corporate spending on AI-related hardware and services will accelerate next year.

The improved risk appetite was underpinned by remarks from New York Fed President John Williams, who indicated the central bank could still cut its policy rate in December if incoming data justify such a move. A transcript of his comments was later posted by the Federal Reserve Bank of New York, fueling speculation that financial conditions may soon ease.

Futures and currency moves

U.S. equity futures were little changed during the early Asian session, suggesting investors may wait for additional economic releases before extending Monday’s gains. The dollar index was steady, while the Japanese yen held near recent lows as traders gauged the Bank of Japan’s tolerance for further currency weakness.

Market outlook

With another batch of U.S. inflation data scheduled for release later in the week, traders across the Asia-Pacific region are expected to monitor Treasury yields and Fed-sensitive sectors closely. In the meantime, the AI theme continues to dominate short-term positioning, with chipmakers and related equipment suppliers capturing the bulk of new inflows.

Crédito da imagem: Visual China Group