Investing.com — Most Asian stocks rose Wednesday following a prolonged recovery in the technology sector as investors awaited key gains from some of the world’s biggest companies.
Technology stocks also benefited from the bargain hunt after suffering steep losses so far in April, due to disappointing profits from major chipmakers and increased fears of longer interest rates.
This has been especially the case on Wall Street over the past two sessions, where US stock benchmarks rose and followed a tech recovery. U.S. stock index futures rose in Asian trading on Wednesday.
Asian tech recovers, major US gains expected
Technology-heavy stock markets were the best performers in Asia on Wednesday, with Japan’s index rising 2%, while South Korea’s rose 1.9%.
Gains in major internet stocks also sent Hong Kong’s share price up 1.1%, helping to head off broader weakness in Chinese markets.
Chinese electric vehicle stocks were marginally positive, following a rebound in Tesla Inc (NASDAQ:), even as the automaker posted disappointing profits and flagged accelerated plans to develop cheaper EV models – a trend that heralds more competition in the sector.
Regional technology stocks staged a recovery against their US peers ahead of earnings reports from some of the world’s largest tech companies in the coming days. Facebook owner Meta Platforms Inc (NASDAQ:) will report its first-quarter earnings on Wednesday, while giants Microsoft Corporation (NASDAQ:) and Alphabet Inc (NASDAQ:) will report earnings on Thursday.
Technology buying has been fueled by growing hopes that positive industry earnings will justify the huge jump in valuations in the first quarter of 2024.
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Asian chip makers rally, hope for AI remains
Major Asian chip stocks were the best performers in the technology sector on Wednesday, recovering sharply from recent losses on hopes that positive technology gains will indicate strong demand for artificial intelligence.
Strong earnings from Texas Instruments (NASDAQ:) also added to the optimism for chipmakers.
Japanese Renesas Electronics Corp (TYO:), Tokyo Electron Ltd. (TYO:) and Advantest Corp. (TYO:) rose between 3.5% and 10%, while South Korea’s rose Samsung Electronics Co. Ltd (KS:) and SK Hynix Inc (KS:) added 3.4% and 5.2% respectively.
TSMC (TW:) (NYSE:) – the world’s largest contract chipmaker – rose 3.6%, following a recovery from NVIDIA Corp (NASDAQ:), one of the company’s largest customers. A recent slide in chip stocks was driven in part by TSMC, after the company warned that demand for AI may not be enough to offset a broader decline in the chip industry.
Most broader Asian markets advanced on Wednesday, albeit at a slower pace. China’s were marginally higher, lagging their peers, amid renewed doubts about an economic recovery in the country.
Australia added 0.3%, paring much of its initial gains after data showed first-quarter growth was stronger than expected. This reading gives the Reserve Bank of Australia more impetus to keep interest rates high for longer.
Japan’s broader index added 1%, with export-oriented stocks benefiting from weakness ahead of a meeting next Friday.
Futures for the Indian index pointed to a positive open, with the index staying within sight of record highs set earlier in April.
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