Asian stocks advanced on Tuesday, extending a recovery in global markets after Wall Street recorded its strongest single-day gain since April. A decline in oil prices following US President Donald Trump’s decision to hold off on fresh military strikes against Iran also lifted investor sentiment.Japan’s benchmark Nikkei 225 rose 2.6% to 60,279.37, while South Korea’s Kospi climbed 4% to 5,219.37.Taiwan’s Taiex gained 3.4%. Hong Kong’s Hang Seng advanced 0.4% to 24,535.74, and the Shanghai Composite edged 0.4% higher to 3,673.54.Australia’s S&P/ASX 200 rose 1.1% to 9,131.70. Meanwhile, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.5% in early trading, according to Reuters.Technology stocks led gains across several markets. Shares in SoftBank Group, an investor in OpenAI, jumped 15% ahead of its earnings announcement. Tokyo Electron rose 5.6%, while Advantest gained 3.4%.In South Korea, Samsung Electronics climbed 4.6% and SK Hynix advanced 5.6%. AFP also reported gains in Taiwan’s technology sector, with chipmaker TSMC rising more than 1% and MediaTek gaining over 7%.
Wall Street rebound and easing oil prices lift sentiment
The rally in Asia followed a strong session on Wall Street on Monday. The S&P 500 jumped 2.3% for a second consecutive gain, leaving it 3.4% below its record high set last month. The Dow Jones Industrial Average rose 2.2%, while the Nasdaq Composite gained 2.7%.US stocks had suffered a sharp sell-off last week after Democratic victories in the midterm elections raised concerns that governments could impose restrictions on the expansion of AI data centres.Investors were also worried about the high cost of building the infrastructure and whether companies would generate sufficient returns on their investments.The fall in oil prices provided further support to equities by easing inflation concerns. Brent crude, the international benchmark, was down around 0.9% to $91.74 a barrel in early Asian trading, while US benchmark crude fell 1% to $85.97.Oil prices have declined after Trump said he would hold off on new military strikes against Iran for the time being. He has also indicated that a resumption of fighting was “highly unlikely” if Washington saw progress in negotiations to end the conflict.Trump said on Monday there was “positive momentum” towards ending the war after meeting Qatar’s prime minister at the White House. He also maintained that the US remained “locked and loaded”, while saying further strikes were unlikely given the preference of key Gulf allies for maintaining the status quo.However, Reuters quoted Nick Twidale, chief market strategist at ATFX Global, as saying that a considerable gap remained between diplomatic efforts and a lasting peace agreement.“The risk now is that markets have moved too far, too quickly … any indication that negotiations are faltering could see a substantial rebound in prices as traders rapidly rebuild the geopolitical risk premium,” he said.
Nvidia shares remain under pressure, US inflation data in focus
Despite the broader technology-led recovery, Nvidia shares fell around 4.3% on Monday, extending pressure on the company amid reports about its chief executive Jensen Huang.The chipmaker said its board was investigating whether Huang had been the target of a foreign intelligence operation. The allegations centred on his reported relationship with a Chinese business executive. Nvidia’s board said it had “no reason to believe” that national security or company secrets had been compromised, but that its inquiry would examine all available information.China’s foreign ministry spokesperson Guo Jiakun dismissed the allegations as “nothing but smears against China”, according to AP.Investors are also watching earnings reports from technology companies this week, including AI cloud computing firm CoreWeave, as concerns persist over the cost and profitability of the AI infrastructure boom. Nvidia is due to report its results next week.Attention was also turning to US inflation data due later on Tuesday, which could influence expectations for the Federal Reserve’s interest rate decisions. Economists polled by Reuters expect consumer prices to have risen 0.3% in October, while core inflation is forecast to increase 0.2%.Traders were pricing in an 84% chance of an interest rate hike next month, up from 74% a week earlier, according to the CME FedWatch tool cited by Reuters.In currency markets, the US dollar rose to 158.06 Japanese yen from 157.90 yen, while the euro slipped to $1.1222 from $1.1266.