Asian Stocks Gain for Sixth Session on Tech Optimism, Oil Prices Ease
By Wayne Cole
Market Overview and Key Drivers
SYDNEY, Sept 23 (Reuters) - Asian shares were aiming for a sixth session of gains on Wednesday as signs of consumer demand for AI apps continued to buoy tech stocks, while oil prices faltered on reports of increased supply out of the Middle East.
Oil Market Developments
Sources told Reuters Saudi Arabia had restarted operations at its East-West Pipeline and may have already resumed exports from the Red Sea port of Yanbu.
US President Donald Trump also claimed talks with Iran in New York had made progress, but then threatened to "annihilate" the country if a deal was not done.
Iranian President Masoud Pezeshkian addresses the UN General Assembly later on Wednesday and markets are alive to reports he might hold talks with Trump.
Brent futures eased 0.1% to $99.18 a barrel, while US crude fell 0.4% to $90.14 a barrel. [O/R]
Geopolitical Factors
Chinese President Xi Jinping arrives in Washington later in the day amid speculation a trade truce between the two countries will be extended, and there could be cooperation over AI.
Asian Stock Performance
Renewed buzz over AI helped South Korean stocks gain 1.2%, with Samsung and SK Hynix both up over 2%. Taiwan firmed 0.9%, to near all-time peaks.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.7%, having now risen for six straight days. Chinese blue chips were little changed.
Japanese markets were closed for a holiday, but Nikkei futures were trading at 66,745, almost 2,000 points above where the cash Nikkei closed on Friday.
Expert Commentary
"We expect a strong reopening in Japan tomorrow, with another move lower in crude, calm conditions in rates and Treasuries, and the Nasdaq cash and futures markets printing all-time highs," said Chris Weston, head of research at broker Pepperstone.
"Memory stocks have taken the leadership baton, backed by another strong session for semi's, which have recorded a sixth consecutive day of gains."
AI Adoption and Tech Sector Momentum
Consumer Demand for AI Agents
CONSUMERS FALL FOR AI AGENTS
The data hardware sector has been buoyed by strong consumer take up of Meta's Muse agent, which has topped US app download charts in the past two weeks.
Analysts are now keen to see how a similar product from Google Labs known as CC will fare with consumers.
Global Market Reactions
US and European Futures
On Wall Street, S&P 500 futures and Nasdaq futures were both holding steady. In Europe, EUROSTOXX 50 futures and DAX futures added 0.3%, while FTSE futures gained 0.2%.
Bond Yields and Central Bank Policy
The dip in oil helped Treasury futures nudge higher, keeping 10-year yields below the 5.0% pain barrier.
However, two-year yields had again hit their highest since mid-2024 at 4.7879% as investors priced in the risk of more tightening from the Federal Reserve.
Richmond Fed President Tom Barkin and Boston Fed President Susan Collins on Tuesday both voiced support for last week's rise in interest rates given concerns about inflation.
Futures markets imply a 54% chance the Fed will hike again in October and have 33 basis points of tightening priced in by year end.
Currency Movements
The prospect of higher rates helped the dollar eke out multi-week highs on the euro, sterling and Canadian dollar, improving its technical background. The euro was left pinned at $1.1440 and near a two-month low.
Analysts noted a call from Trump to ban U.S. diesel exports, was potentially bad news for European inflation since the zone relied heavily on U.S. shipments of the fuel.
Europe already faces a shortage of natural gas that could push energy prices higher into the winter.
The dollar was a shade firmer on the yen at 157.60, with speculators wary of drawing more Japanese intervention on any push past 160.00.
Commodities Update
In commodity markets, gold eased 0.3% to $4,341 an ounce, while copper neared record highs having climbed 18% so far this year. [GOL/] [MET/L]
(Reporting by Wayne Cole; Editing by Christopher Cushing)
