Tech Leads Asian Stock Rally As Wall Street Rebounds

Asian stocks rallied on Tuesday, extending a technology-led surge on Wall Street as investors snapped up shares at lower prices after last week’s rout, while another drop in oil prices added to the upbeat mood.

Artificial intelligence (AI)-linked firms led gains across the region, in stark contrast to the battering they took after last Tuesday’s Democratic sweep of Congress stoked regulatory concerns.

Amazon, Microsoft and Apple were among the big gainers in New York on Monday as bargain-hunters returned, with the Nasdaq jumping 2.7 percent and the Dow rising 2.2 percent.

Seoul surged more than 5 percent at one point on gains for chipmakers SK hynix and Samsung, while Tokyo jumped almost 3 percent on strong performances by Kioxia, SoftBank and Tokyo Electron.

Taiwan’s TSMC rose more than 1 percent and MediaTek more than 7 percent, lifting the Taiex 3.5 percent. Hong Kong, Shanghai, Sydney, Singapore, Manila and Wellington also rose.

However, traders remain on edge about profitability given the vast sums pumped into the sector, and are also watching Nvidia after chief executive Jensen Huang admitted to an affair amid reports of a Chinese espionage plot.

SPI Asset Management’s Stephen Innes said the gains did not mean markets were back in good health.

“The market rallied because the sellers stepped away, not because the entire buy-side suddenly rediscovered its courage,” he wrote in a commentary.

Oil prices continued to retreat on hopes the US and Iran will bring an end to the Middle East crisis.

Both main contracts fell around 1 percent on Tuesday, extending Monday’s drop in which Brent lost almost 6 percent.

They have shed around 20 percent this month as traders bet on a resolution to the seven-month-old conflict, which has sent inflation soaring and forced central banks to raise interest rates.

US President Donald Trump said on Monday there was “positive momentum” toward ending the war after meeting Qatar’s prime minister at the White House, adding that further strikes were “quite unlikely” as key US allies in the Gulf “would prefer the status quo”.

By around 0230 GMT, Tokyo’s Nikkei 225 was up 2.9 percent at 60,475.78 and Seoul’s Kospi up 4.1 percent at 5,223.87, while Hong Kong’s Hang Seng rose 0.4 percent and the Shanghai Composite 0.3 percent. West Texas Intermediate fell 1.1 percent to $85.87 per barrel and Brent North Sea crude 1.0 percent to $91.63.