(Bloomberg) — Global stock gains extend to Europe as Nvidia’s explosive revenue forecast reaffirms investors’ confidence in technology and semiconductor companies amid a boom in the use of generative AI. It looks like it’s going to expand.
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European Stoxx50 futures rose nearly 0.9%, with Asian and U.S. stock futures also rising. Japanese stocks rebounded, with the Nikkei stock average closing at its highest level since 1989, driven by gains in technology stocks and chip gear makers.
“After the recent consolidation in stock prices, Nvidia’s earnings growth was the perfect catalyst for Japanese stocks to reach new all-time highs,” said Charu Chanana, a strategist at Saxo Capital Markets. “Structural tailwinds from geopolitics to corporate reform to a weaker yen continue to suggest that Japanese stocks are a story of macro meets momentum, and that the peak is still quite far away,” he said.
Stock prices in South Korea, Taiwan and China also rose, pushing the Asian stock index to its highest level in nearly two years.
U.S. stock futures rose in Asian trading following Nvidia’s results. Shares of the company soared as much as 11% in post-market trading after the company said first-quarter sales are likely to reach $24 billion, up from previously expected sales of about $22 billion.
The results were expected to give a boost to global stock markets, and those expectations were met with flying colors. Nvidia’s Asia-based supplier SK Hynix Inc. soared to a 24-year high, while Advantest Corp. also hit a record high.
“As NVIDIA goes, so does the market,” said Kim Forrest, chief investment officer at Boke Capital Partners LLC. “And the results look good enough. This confirms the narrative that AI will remain strong for the foreseeable future. If this narrative supported the market last year, why is it doing the same thing this year? Is it not moving?”
Mainland Chinese stocks are heading for their longest rally since 2020, following a series of recent measures taken by authorities to stabilize markets and boost investor sentiment. The CSI300 and Hang Seng indexes rose as securities regulators tightened their grip on the market following an order barring large institutional investors from reducing their shareholdings at the start and end of the trading day, people said. did.
“We think the government will continue with its supportive policies, which will have positive spillover effects for Asia,” Yifan Fu, regional CIO and head of Asia-Pacific macroeconomics at UBS Wealth Management, told Bloomberg TV. “Asia’s GDP growth will be better than last year compared to the rest of the world.”
Investors in Asia rediscovered the optimism seen towards the end of 2023, with the country on track to overcome January’s losses this month, boosted by China’s recovery and Japan’s gains. Expectations for improved technology profits led by semiconductor manufacturers in the region are also increasing the appeal of stocks on the continent.
The dollar fell against the currencies of 10 major countries. The yen was almost unchanged at around 150 yen to the dollar, and the won’s rate of increase was reduced in response to Bank of Korea Governor Lee Chang-yong’s remarks in response to the Bank of Korea’s decision to leave its main interest rate unchanged.
U.S. Treasuries were firmer in Asian trading after Wednesday’s sell-off, with the 10-year Treasury yield rising 5 basis points. Selling pressure was felt across the curve following the sale of $16 billion in 20-year bonds and the release of Federal Reserve minutes that revealed a cautious stance on lowering interest rates.
Richmond Fed President Thomas Barkin emphasized that price pressures in sectors such as housing persist, despite falling headline inflation. Meanwhile, Federal Reserve Board member Michelle Bowman pushed back against the prospect of an imminent rate cut.
Economic data scheduled for release later Thursday will include eurozone inflation and PMI, as well as U.S. new jobless claims and home sales.
Elsewhere, Nestlé SA expects sales growth to slow as inflation eases due to higher prices to boost consumption, while Mercedes-Benz Group AG expects a slowdown in the global economy to reduce its earnings this year. It is expected that the number will decrease.
West Texas Intermediate crude rose 1.1% on Wednesday, above $78 a barrel, supported by tight physical supplies. Gold rose above $2,029 per ounce. Bitcoin stabilized after falling on Wednesday.
This week’s main events:
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Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, CPI, Thursday
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U.S. new unemployment insurance claims, U.S. existing home sales, Thursday
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ECB releases January Governing Council report on Thursday
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Fed President Lisa Cook and Minneapolis Fed President Neel Kashkari meet on Thursday
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Chinese real estate prices Friday
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Germany IFO Business Environment, GDP, Friday
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ECB releases one-year and three-year inflation expectations survey on Friday
The main movements in the market are:
stock
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As of 3:22 p.m. Tokyo time, S&P 500 futures were up 0.8%.
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Nasdaq 100 futures rose 1.5%
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S&P/Australian Stock Exchange 200 futures little changed
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Hong Kong’s Hang Seng rose 0.7%
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The Shanghai Composite rose 0.9%.
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Euro Stoxx50 futures rose 0.8%
currency
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The Bloomberg Dollar Spot Index fell 0.1%.
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The euro rose 0.2% to $1.0837.
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The Japanese yen remained almost unchanged at 150.24 yen to the dollar.
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The offshore yuan was almost unchanged at 7.1980 yuan to the dollar.
cryptocurrency
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Bitcoin rose 0.4% to $51,578.65
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Ether rose 0.3% to $2,935.21
bond
merchandise
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West Texas Intermediate crude rose 0.3% to $78.18 per barrel.
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Spot gold rose 0.2% to $2,029.92 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Winnie Hsu.
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