By Gregor Stuart Hunter
SINGAPORE, Oct 21 (Reuters) – Asian stocks came close to reclaiming their highest level since last week’s selloff in regional trading on Wednesday, buoyed by gains on Wall Street and early signs of a strong corporate earnings season.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.1%, led by a 3.3% gain for Korean shares, while Japan’s Nikkei 225 climbed 0.9%. S&P 500 e-mini futures rose 0.2%, although renewed concerns over AI-related data centre operators dampened risk appetite.
Stocks in the region have steadied since last week’s selloff but have traded in a tight range. Stocks on Wall Street were mildly positive on Tuesday, pushing the S&P 500 0.3% higher as oil prices and Treasury yields eased. With 13% of S&P 500 companies having reported, 86% have beaten earnings estimates, according to LSEG data.
“Under the hood there remains concerns around the sustainability of the AI trade,” MUFG analysts in Singapore wrote in a note. “Over here, you are seeing some signs that segments of the data centre businesses are starting to see more risk premia priced in.”
Australian data centre operator NextDC shed nearly half of its market capitalisation on Wednesday after sharply cutting revenue forecasts for the year ahead and putting future developments on hold, extending the burst of negative sentiment towards global AI stocks.
Elsewhere, shares in South Korean artificial intelligence infrastructure company Elice Group surged almost 30% on Wednesday, rebounding from a slump in its market debut on Tuesday.
Shares in companies in Japan and Taiwan that are suppliers to Tesla and SpaceX advanced after Elon Musk said on Tuesday that a merger of the two companies would be “a good idea” and that they had formed special committees to discuss a union.
In Mumbai, Jio Platforms’ <JIOP.NS> $3.2 billion IPO was fully subscribed in less than two hours of public bidding, as investors flocked to India’s largest share sale and the first from billionaire Mukesh Ambani’s Reliance in two decades.
The yield on the French 10-year government bond was up 4.7 basis points at 4.9605%, as investors digested Prime Minister Sebastien Lecornu’s announcement that the government would reinforce police with a “massive” deployment of troops to quell protests planned for Saturday. That move in OATs pushed the spread over similarly dated German bunds 2.3 basis points higher to 154.7 basis points.
Brent crude was 1.1% higher at $110.00 a barrel in Asian trade, as escalating conflict in the Gulf fuelled fears of supply disruptions.
US envoy Steve Witkoff is due to meet Russian President Vladimir Putin later in the day after what a US official called “constructive” talks with Ukrainian President Volodymyr Zelenskiy in Norway, as President Donald Trump said it was time for Ukraine to end the war.
The yen was flat against the dollar at 158.165 after government data released on Wednesday showed Japan’s exports in September rose 16.7% from a year earlier, missing estimates. Strong demand for semiconductors and AI-related products offset weakness in other sectors.
A Reuters poll found a majority of economists believe the Bank of Japan will refrain from hiking interest rates on October 30 before voting for a 25-basis-point increase in December, followed by quarterly hikes.
In emerging markets, Indonesia’s central bank held its main interest rate unchanged for a fourth straight policy review on Wednesday. It simultaneously raised its deposit facility rate by 25 basis points and cut banks’ reserve requirement ratio by 2 percentage points to support liquidity and lending after markets were roiled by an MSCI warning last week that Indonesian stocks could be excluded from its major benchmarks.
Economists polled also believe the Federal Reserve will skip a hike at its next meeting on October 28 before raising rates in December. Fed funds futures are pricing an implied 83% probability of a hold later this month, little changed from a day earlier, according to the CME Group’s FedWatch tool. The yield on the US 10-year Treasury bond was up 1 basis point at 5.123%.
Bitcoin was flat at $82,757.36, while ether was down 0.2% at $2,441.17.
(Reporting by Gregor Stuart Hunter; Editing by Muralikumar Anantharaman and Louise Heavens)
Brought to you by www.srnnews.com
