Asian and European stocks rise as oil falls and AI boosts tech
Asian and European stocks rose on Sept 23 as oil prices fell for a sixth straight session, while a fresh wave of optimism on artificial intelligence (AI) lifted tech stocks globally.
Sources told Reuters that 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 said talks with Iran in New York had made progress, but then threatened to “annihilate” the country if a deal was not reached.
“We’re probably nearing a point where it’s in both sides’ best interests to de-escalate the conflict and find a way to move forward,” said Brock Weimer, analyst, investment strategy, at Edward Jones.
Iranian President Masoud Pezeshkian was set to address the UN General Assembly later on Sept 23 with markets alert to reports he might hold talks with Trump.
A sustained resumption of oil flows through the Strait of Hormuz would be crucial to keeping inflation in check, which in turn would impact the global interest rate outlook.
However, caution persists as similar optimism has unravelled quickly in the past.
“We’ve been through a series of starts and stops like this,” said Cole Smead, chief executive officer and portfolio manager at Smead Capital Management.
The pan-European STOXX 600 index rose 0.17 per cent to 643.86 points, while Brent crude futures fell 0.40 per cent to US$98.83 a barrel.
On Wall Street, futures tracking the benchmark S&P 500 and the tech-heavy Nasdaq-100 were up 0.10 per cent and 0.03 per cent, respectively.
An MSCI index of global stocks was steady after four consecutive days of gains.
Asia rides AI wave
In Asia, stocks rose as consumer hunger for AI apps continued to buoy tech stocks.
Renewed buzz over AI helped South Korean stocks gain 0.9 per cent, with Samsung up nearly 1 per cent, while Taiwan’s benchmark firmed 0.8 per cent to near all-time peaks.
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 Alphabet’s Google Labs, known as CC, will fare with consumers.
Chinese President Xi Jinping was due to arrive in Washington later in the day amid speculation that a trade truce between US and China will be extended, and there could be cooperation over AI.
Japanese markets were closed for a holiday, but Nikkei futures were trading at 66,775, about 1,760 points above where the cash Nikkei closed on Sept 18.
“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 semis, which have recorded a sixth consecutive day of gains.”
Also of note was demand for SoftBank’s US$10 billion (S$12.7 billion)-plus debt deal which has reportedly drawn more than US$20 billion in indications of interest. That would make it one of the largest junk bond deals ever.
The dip in oil helped Treasury futures nudge higher, keeping 10-year yields below the 5 per cent pain barrier.
Richmond Fed president Tom Barkin and Boston Fed president Susan Collins on Sept 22 both voiced support for last week’s rise in interest rates given concerns about inflation.
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 US$1.1414, near a two-month low.
Analysts noted a call from Trump to ban US diesel exports was potentially bad news for European inflation since the zone relied heavily on US shipments of the fuel.
The dollar was firmer on the yen at 157.76, with speculators wary of drawing more Japanese intervention on any push past 160. REUTERS
