Asian Shares Climb as Equities Hit Record Highs: Markets Wrap – Yahoo Finance

February 22, 2024

(Bloomberg) — Asian stocks extended their gains on Friday, driven by a global rally that saw markets from the U.S. to Europe to Japan hit record highs.

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Stock prices in mainland China, Hong Kong, Australia and South Korea all rose. Japanese markets are closed on Fridays due to public holidays.

Bullish sentiment grew in the U.S. after overnight gains, with the S&P 500 and Nasdaq 100 indexes closing at new records. A positive outlook for Nvidia Inc., the most valuable chipmaker, has sent the company soaring 16% amid an artificial intelligence frenzy, while the latest data showed the world’s biggest economy remains strong.

Nvidia’s $277 billion one-day boost to its market cap on Thursday was the largest single-session increase in value ever, surpassing Metaplatforms Inc.’s $197 billion gain.

“Given the lack of interest rate cuts throughout the year, the main catalyst for the market will inevitably be earnings,” said Quincy Crosby, chief global strategist at LPL Financial. ” he said. “It was clear from the top down to the bottom line that the demand for AI infrastructure was growing exponentially.”

Markets ignored signs that China’s economic slowdown was taking hold. China’s sluggish housing market shows no signs of improving, with data released Thursday showing the number of foreclosed properties for sale in China increased at a faster pace in January.

Back in the US, traders took the Fed’s more hawkish comments in stride. The 10-year U.S. Treasury yield was little changed on Thursday at 4.32%. As Friday is a public holiday in Japan, trading in cash government bonds is closed in Asia.

“As we become more confident that disinflation is underway and sustainable, the changing outlook justifies a change in policy rates,” Federal Reserve President Lisa Cook said at an event at Princeton University. Probably.”

AI computing boom

Nvidia’s market cap has increased by more than $700 billion this year and is now worth more than $1.9 trillion. Investors are betting the company will remain the biggest beneficiary of the AI computing boom.

Companies such as Amazon.com Inc., Meta Platforms, Microsoft Corp. and Alphabet Inc.’s Google are fast investing in hardware for AI computing and are Nvidia’s biggest customers, accounting for 40% of its revenue. It accounts for close to %.

“Demand for AI is rapidly increasing across companies, industries and countries around the world,” said Tom Hulick of Strategy Asset Managers. “We own NVDA and continue to hold the company. This is an exciting momentum play that we have been promoting and participating in for several years.”

The rise in tech stocks has pushed the Nasdaq 100’s valuation higher than in previous years, as has the S&P 500. Higher valuations could ultimately limit further growth as investors consider how much they are willing to pay for stocks with future value.

In commodity markets, oil fell as investors weighed signs of market tightening against persistent concerns about demand. Gold prices were buoyed by U.S. economic data and Fed minutes that showed policymakers were comfortable raising interest rates for an extended period of time if necessary.

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