July 11 2024: Asian stocks rallied on Thursday, driven by a surge in technology stocks after strong revenue figures from chipmaking giant TSMC fueled optimism about artificial intelligence. Japanese stocks also reached new peaks.
Regional markets followed an overnight rally on Wall Street, where the S&P 500 and NASDAQ Composite hit record highs. Comments from Federal Reserve Chair Jerome Powell fostered optimism about a soft landing for the U.S. economy and potential interest rate cuts this year.
Powell’s remarks put upcoming consumer price index inflation data in the spotlight, as this data is likely to influence the Fed’s interest rate outlook.
Tech and Chipmaking Stocks Surge Following TSMC
Regional tech stocks were the standout performers, with chipmakers rising alongside Taiwan’s TSMC (TW:2330) (NYSE
). TSMC reported much stronger-than-expected second-quarter revenue, driving its stock up nearly 2% in Taiwan trade to a record high. The chipmaker saw significant benefits from increased demand in the artificial intelligence sector.
This optimism extended to other Asian tech stocks. The tech-heavy KOSPI and Hang Seng indexes added 1.5% and 0.8%, respectively. Memory chip maker SK Hynix Inc (KS:000660), closely linked to the AI industry, surged over 3%. South Korean stocks also reacted positively to the Bank of Korea keeping interest rates steady for the 12th consecutive meeting.
Japan’s Nikkei 225 Hits Record High
Tech stock gains boosted Japanese markets, with the Nikkei 225 index climbing 0.9% to a record high of 42,460.0 points. The broader TOPIX index added 0.7%. A weaker yen attracted foreign investment, benefiting export-oriented stocks. Weak core machinery orders data and underwhelming producer inflation data released on Wednesday reinforced expectations that the Bank of Japan will remain cautious about raising interest rates further.
Broader Asian Markets Advance
Broader Asian markets also saw gains as expectations of U.S. interest rate cuts increased risk appetite. Australia’s ASX 200 rose 0.9%, nearing a record high.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 1.1% and 0.7%, respectively, supported by tech stocks rebounding from over four-month lows hit earlier in July. Despite recent economic concerns, focus is now on trade data due on Friday for further insights into Asia’s largest economy.
Futures for India’s Nifty 50 index indicated a positive open, with the index poised to rebound from recent losses. The Nifty hit a series of record highs through June and early July, followed by some profit-taking in recent sessions.
