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HomeLatestAsian Stocks Experience Mild Gains Amid Tech Strength and US CPI
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Asian Stocks Experience Mild Gains Amid Tech Strength and US CPI

On Wednesday, Asian stocks saw modest gains, primarily driven by the strength in major technology shares, following a rally in their Wall Street counterparts. However, overall gains were tempered as concerns about rising U.S. inflation influenced expectations of higher interest rates.

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The S&P 500’s record high and positive results from Oracle, fueled by excitement over artificial intelligence, provided a positive lead for regional markets. Nevertheless, the sustainability of these gains remained uncertain, as U.S. stock index futures declined slightly during Asian trade.

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Among the notable performers for the day, South Korea’s KOSPI index rose by 0.3%, with tech heavyweight Samsung Electronics Co Ltd gaining 0.7% on reports of the company’s plans to further invest in artificial intelligence by developing new high-speed memory chips.

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Hong Kong’s Hang Seng index remained flat as the strength in the tech sector offset broader losses. Tech giants like Baidu, BYD, and Semiconductor Manufacturing International Corp were among the top gainers, rising between 2% and 4%.

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker and a major supplier to NVIDIA Corporation, rose by 1.3% in Taiwan. The positive sentiment towards tech stocks was boosted by renewed optimism in artificial intelligence, following Oracle’s strong earnings and its announcement of further investment in AI.

However, outside the tech sector, broader Asian markets exhibited a flat-to-low range. The hotter-than-expected U.S. consumer inflation data reduced the likelihood of early rate cuts by the Federal Reserve. Concerns about sluggish Chinese economic growth also resurfaced, leading to declines in China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes.

In Japan, stocks continued to move away from the record highs reached the previous week. The Nikkei 225 fell by 0.2%, and the TOPIX shed 0.2%. The Bank of Japan’s (BOJ) potential shift away from ultra-dovish policies, including negative interest rates and yield curve control, contributed to the losses. Traders are pricing in a possible rate hike during the BOJ’s upcoming meeting.

Ongoing negotiations between major Japanese employers and employee unions for higher wages are seen as a key consideration for the BOJ in deciding on interest rate changes.

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