Tech rally in US buoys optimism in Asian mkts

Seoul: Asian markets forged higher Tuesday after another day of gains on Wall Street led by technology stocks. US futures were nearly flat and oil prices edged higher. Tokyo’s Nikkei 225, reopening after a national holiday, jumped 1.6% to 38,835.10. The advance was led by semiconductor companies like Tokyo Electron, which closed 4.8% higher, and Advantest, which picked up 2.2%. The Kospi in South Korea surged 2.1% to 2,731.83, helped by big tech companies like Samsung Electronics, which racked up a 4.5% gain, and smaller rival SK Hynix, which added 3.7%. Hong Kong’s Hang Seng shed 0.5% to 18,470.90. But the Shanghai Composite index recovered from early losses, gaining 0.3% to 3,148.56. Australia’s S&P/ASX 200 advanced 1.3% to 7,781.70 after the central bank decided to keep interest rates unchanged at 4.35%.

“While the Reserve Bank of Australia has likely set the bar high for any rate hikes, it will probably need to see several more months of soft data before it is confident that it can loosen policy settings. All told, rate cuts will likely take longer to materialize than most are anticipating,” Abhijit Surya of Capital Economics said in a commentary.

Taiwan’s Taiex was up 0.6%, while India’s Sensex gave up 0.7% as the country began the third phase of its weeks’ long national elections process. On Monday, the S&P 500 rose 1% to 5,180.74. The Dow Jones Industrial Average added 0.5% to 38,852.27, and the Nasdaq composite jumped 1.2% to 16,349.25. Tech stocks were at the forefront, with familiar ringleaders Nvidia and Super Micro Computer again pulling the market higher. They’ve had a couple hiccups recently, but a frenzy around artificial-intelligence technology has Nvidia up 86.1% for the year so far after Monday’s 3.8% gain. Super Micro is up 192.1% after its gain of 6.1%. Berkshire Hathaway added 1% after Warren Buffett’s company reported its latest quarterly results over the weekend. It helped to offset a 9.7% slide for Spirit Airlines, which reported a slightly worse loss than expected. The carrier said it’s facing increased competition in many of its markets, particularly between the United States and Latin America. Apple slipped 0.9% after Berkshire Hathaway revealed it had pared its stake in the tech giant.

The US stock market has been swinging since setting a record at the end of March. It sunk for weeks on fears that stubbornly high inflation would prevent or at least delay the Federal Reserve from delivering the cuts to interest rates that Wall Street craves. But markets found a burst of optimism at the end of last week following a cooler-than-expected jobs report. It suggested the US economy could nail the tightrope walk of staying strong enough to avoid a bad recession, but not so firm that it puts too much upward pressure on inflation. Traders are betting on a nearly 89% chance that the Fed will cut its main interest rate at least once before the end of the year, according to data from CME Group. That’s up from from an 81.6% probability seen a week earlier. Lower rates would help ease the pressure on the economy and financial system. Goldman Sachs economist David Mericle said he still expects two cuts to rates this year, in July and November, after Fed Chair Jerome Powell “pushed back strongly against the possibility of further rate hikes” at his press conference last week. This week is relatively quiet. The bulk of companies in the S&P 500 have already reported their earnings for the first three months of the year, with more than three-quarters topping profit expectations, according to FactSet.