Asian stock markets largely experienced an upward trend on Friday, mirroring the positive momentum seen on Wall Street. Key drivers behind these gains included strong performances from tech giants like Tesla, IBM, and Meta Platforms, all of which reported robust profits. This surge positively impacted the futures market and drove up oil prices as well.
Japan took center stage with its core inflation rate climbing to 2.5% in January, comfortably exceeding the Bank of Japan's target of 2%. This rise indicates a potential shift towards more interest rate hikes in the future. Additionally, the nation's unemployment rate showed improvement, dipping to 2.4% in December from the previous month's 2.5%. Consequently, Tokyo's Nikkei 225 index saw a modest increase of 0.1%, reaching 39,540.37.
South Korea's market painted a different picture with the Kospi index falling by 1.4% to 2,501.83 after the holiday break. The turmoil primarily stemmed from the tech sector, where SK Hynix, a significant supplier to Nvidia, plummeted 9.9%. Samsung also saw its shares fall by 2.4%. This downturn was further fueled by speculations following Chinese startup DeepSeek’s claim of creating a groundbreaking AI language model capable of bypassing expensive chip requirements, rattling the tech equilibrium.
Elsewhere, Australia presented a brighter scenario as the S&P/ASX 200 index advanced by 0.3%, reaching 8,516.90, while Bangkok's SET index went up by 0.1%. Markets in Hong Kong and Shanghai remained closed in observance of the lunar new year.
American indices also displayed an uptrend. The S&P 500 rose by 0.5%, the Dow Jones Industrial Average increased by 0.4%, and the Nasdaq Composite went up 0.3%. Meta Platforms notably bolstered these numbers with a 1.6% rise after outperforming profit expectations and accentuating its commitment to artificial intelligence advancement.
The tech euphoria tied to AI has driven U.S. stocks to unusual highs, but this week’s unsettling reports from DeepSeek briefly threatened the sector's stability. Nvidia, a key player in the AI chip market, saw fluctuations but ultimately contributed a 1% gain, reinforcing the S&P 500's growth.
Adding complexity, Microsoft's shares fell by 6.2% despite meeting profit forecasts, with a slowdown in cloud computing growth causing concern. Microsoft's CEO, Satya Nadella, addressed these issues, acknowledging the benefits of DeepSeek's innovations in AI, which promise to enhance efficiency and affordability.
Meanwhile, U.S. Treasury yields held steady after a report highlighted moderate economic growth at the end of 2024, raising questions about future fiscal policy decisions in Washington.
In commodities, U.S. crude oil experienced a price increase, adding 55 cents to reach $73.28 a barrel. Brent crude followed suit, rising 46 cents to $76.35 a barrel. On the currency front, the U.S. dollar showed a slight increase against the Japanese yen, trading at 154.42 yen per dollar, while the euro’s value remained relatively stable.
