(Bloomberg) — Asian equities and US stock futures rose Thursday in a sign of fresh momentum in global equities after Nvidia Corp. unveiled a better-than-expected revenue forecast.
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Japanese shares rallied, supported by a depressed yen, with the Nikkei 225 Index briefly surpassing its 1989 closing record high. South Korea shares gained, while Chinese benchmarks opened higher and Australian stocks erased early losses. The moves lifted a gauge of the region’s equities to its highest level in almost two years.
Gains in US contracts during Asian hours were spurred on by Nvidia results. The tech company’s shares soared as much as 11% in post-market trade after it said first-quarter revenue would likely hit $24 billion, above prior estimates of around $22 billion.
The results were expected to provide a catalyst for global equities, and delivered on the promise. Nvidia’s Asia-based suppliers SK Hynix Inc and Advantest Corp rose as did a region-wide index of semiconductor companies.
“As goes Nvidia, so goes the market,” said Kim Forrest, chief investment officer of Bokeh Capital Partners LLC. “And it looks like the results are good enough. It does confirm the narrative that AI is going to continue to be strong for the foreseeable future. This narrative supported the markets last year, why wouldn’t it do the same this year?”
Gains for mainland China and Hong Kong benchmarks came in the wake of fresh support for financial markets. The country has banned major institutional investors from reducing equity holdings at the open and close of each trading day, an order from the securities watchdog to major asset managers and brokerages stated, according to people familiar with the matter. The regulator has also stepped up the monitoring of short selling.
“Things are still not that rosy,” said Xiaojia Zhi, chief China economist for Credit Agricole, speaking on Bloomberg Television. “Deflationary pressures are likely to continue for the rest of the year even though it will be less prominent compared to last year.”
An index of the dollar was slightly weaker Thursday as the greenback slipped against Group-of-10 currencies. The yen was largely unchanged at around 150 per dollar. The won strengthened after the Bank of Korea left the key interest rate unchanged.
Treasuries steadied in Asia after selling off Wednesday pushing the 10-year yield five basis points higher. The selling pressure was felt across the curve, and followed a $16 billion sale of 20-year bonds and the release of Federal Reserve meeting minutes that revealed caution about cutting rates. Australian and New Zealand bonds tracked the declines.
Richmond Fed chief Thomas Barkin highlighted persistent pricing pressures in sectors such as housing even though headline inflation is falling. Fed Governor Michelle Bowman, meanwhile, pushed back against the prospect of imminent cuts.
Elsewhere, Qantas Airways Ltd said first-half profit declined as airfares fell from their post-Covid spike as it delivered a A$1.25 billion underlying first-half, pre-tax profit, down from a year earlier, but less than analysts expected. United Overseas Bank Ltd.’s fourth-quarter profit expanded, powered by stronger fee income from wealth and credit cards.
Later Thursday economic data set for release includes Eurozone inflation and PMIs, as well as US initial jobless claims and home sales.
West Texas Intermediate rose to extend a 1.1% Wednesday gain, supported by tightening physical supplies. Gold was steady at around $2,027 per ounce. Bitcoin steadied after a decline on Wednesday to trade around $51,250.
Key Events This Week:
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Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, CPI, Thursday
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US initial jobless claims, US existing home sales, Thursday
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ECB issues account of January meeting, Thursday
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Fed Governor Lisa Cook and Minneapolis Fed President Neel Kashkari speak, Thursday
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China property prices, Friday
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Germany IFO business climate, GDP, Friday
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ECB publishes 1- and 3-Year inflation expectations survey, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.7% as of 10:50 a.m. Tokyo time
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Nasdaq 100 futures rose 1.4%
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Japan’s Topix rose 1%
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Australia’s S&P/ASX 200 was little changed
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Hong Kong’s Hang Seng rose 0.2%
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The Shanghai Composite rose 0.6%
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Euro Stoxx 50 futures rose 0.8%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0828
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The Japanese yen was little changed at 150.31 per dollar
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The offshore yuan was little changed at 7.1949 per dollar
Cryptocurrencies
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Bitcoin fell 0.2% to $51,300.77
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Ether fell 0.4% to $2,916.25
Bonds
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The yield on 10-year Treasuries declined two basis points to 4.30%
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Japan’s 10-year yield was unchanged at 0.720%
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Australia’s 10-year yield advanced one basis point to 4.18%
Commodities
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West Texas Intermediate crude rose 0.2% to $78.07 a barrel
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Spot gold rose 0.1% to $2,028.39 an ounce
This story was produced with the assistance of Bloomberg Automation.
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