Asian stocks surge driven by tech, oil falls

While this morning the newspaper reported the decline of European stock markets under the weight of inflation and rising oil prices, the Asian session tells an opposite story. Tokyo closed up 3.3% and Seoul 1.9%, while Sydney lost 2%. Chinese markets remained closed for national holidays, staying out of the day’s tally.

Driving the indices were two factors concentrated in the same sector: Micron Technology’s forecasts, which came in better than expected, and the release of Gemini 4 Argon, the new flagship artificial intelligence model unveiled by Google. The markets’ reception of the two announcements particularly boosted technology stocks listed on Asian exchanges, in a context in which investors rewarded both Micron’s concrete results and the expectations generated by Google’s new product.

On the commodities front, the movement went in the opposite direction compared to equities: oil fell, with WTI trading around $88.8 per barrel and Brent at $96.6. The yield on the US 10-year Treasury remains elevated, however, close to 5.28%, a level that continues to weigh on long-term borrowing costs and on the valuations of stocks most sensitive to interest rates.

The picture emerging from the Asian session is therefore distinct from the European one described this morning: two geographic areas, on the same day, reacted differently to different factors — on one hand inflation and tension over oil in Europe, on the other enthusiasm for technology announcements in Asia. It remains to be seen how much of this momentum is tied to dynamics specific to the technology sector and how much could extend to other sectors in the coming days.

Chinese markets, closed for holidays, remain the biggest unknown in determining whether the Asian rally will find confirmation when they reopen. The discrepancy between Sydney’s decline and the strong gains in Tokyo and Seoul also signals that optimism linked to tech was not uniform across the region.