(Bloomberg) — Asian stocks rose for a second day on Friday, boosted by the global stock rally that has sent markets from the U.S. to Europe and Japan to all-time highs.
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Australian, Taiwanese and South Korean stocks rose. Japanese markets were closed on Friday for a holiday. S&P futures remained near all-time highs around 5,100 after Thursday's strong tech rally, while European contracts held steady.
China remained an exception. The CSI 300 Index was on track for its first decline in nine sessions, with both it and Hong Kong's Hang Seng Index swinging from a rise to a decline.
The broadly optimistic sentiment in Asia was followed by overnight gains in the US, where the S&P 500 and Nasdaq 100 indices, as well as MSCI's All-County Index, closed at new records. A positive outlook for Nvidia Corp., the most valuable chipmaker, helped the company rise 16% amid artificial intelligence mania, while new data showed the world's largest economy is still doing well.
Nvidia's $277 billion one-day market capitalization jump on Thursday was its largest ever gain in a single session – surpassing Meta Platforms Inc.'s recent gain of $197 billion.
“The key catalyst for markets would inevitably be earnings without rate cuts later in the year, and that's where Nvidia excited investors and traders alike,” said Quincy Krosby, chief global strategist at LPL Financial. “It was clear from top to bottom that the demand for AI infrastructure was growing exponentially.”
The Hang Seng Mainland Properties Index rose for a fourth day as there were first signs of improvement in the country's real estate sector in 10 months. China's property prices for both new and existing units fell more slowly in January, according to data released on Friday.
The story goes on
Markets also analyzed signs that China's economic slowdown is becoming more entrenched. Data released on Thursday showed the number of foreclosed homes for sale in China rose faster in January.
“The Chinese authorities can't live with such a weak stock market, but in my opinion it's actually just a rebound in trading,” said Garry Evans, chief global asset allocation strategist at BCA Research. “At the moment, China’s economy still looks very weak.”
Back in the US, traders took the Fed's more aggressive comments in stride. 10-year Treasury yields were little changed at 4.32% on Thursday. Trading in cash government bonds in Asia was closed on Friday due to the Japanese holiday.
“At some point, as we become more confident that disinflation is ongoing and sustainable, a changing outlook will warrant a change in the federal funds rate,” Federal Reserve Governor Lisa Cook said at an event at Princeton University.
AI computing boom
Nvidia's market capitalization has now risen by more than $700 billion this year – now worth over $1.9 trillion – as investors bet that the company will be the main beneficiary of an AI computing Booms will remain.
The tech rally has pushed the Nasdaq 100's valuation to elevated levels by historical standards, and a similar picture is emerging for the S&P 500. High valuations could ultimately curb further gains as investors weigh how much they are willing to pay for future valuations Stocks to pay growth.
In commodities, oil prices fell as investors weighed signs of tight market conditions against ongoing concerns about demand. Gold fluctuated after U.S. economic data and Fed minutes suggested policymakers are comfortable raising interest rates for longer if necessary.
In corporate news, Standard Chartered Plc announced a $1 billion share buyback and fourth-quarter earnings that beat analysts' estimates.
Important events this week:
Germany IFO business climate, GDP, Friday
The ECB will publish a survey on 1- and 3-year inflation expectations on Friday
Some of the key moves in the markets:
Shares
S&P 500 futures were little changed at 2:33 p.m. Tokyo time
Hong Kong's Hang Seng has changed little
The Shanghai Composite rose 0.2%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0825
The Japanese yen was little changed at 150.58 per dollar
The offshore yuan was little changed at 7.2080 per dollar
Cryptocurrencies
Bitcoin fell 1% to $51,149.26
Ether fell 1% to $2,956.11
Tie up
The yield on 10-year government bonds remained little changed at 4.32%
Japan's 10-year yield was little changed at 0.715%
Australia's 10-year yield rose four basis points to 4.20%
raw materials
This story was produced with support from Bloomberg Automation.
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