TOKYO: Enthusiasm for tech shares boosted Asian stocks for a second day Wednesday, as more mayhem in the Middle East lifted Brent crude back above US$92 a barrel and the yen came under renewed pressure.
Tech stocks have had a bumpy ride because of fears that the buzz around artificial intelligence may not match reality and that shares in the sector are overcooked.
But mirroring overnight gains on the Nasdaq, Asia tech stocks rose for a second straight day, with Tokyo up almost two per cent and semiconductor-heavy Seoul soaring 5.4 per cent.
“During the early phase of the (AI stock) boom, companies were rewarded simply for announcing larger investment plans,” said Stephen Innes at SPI Asset Management.
“A higher spending guide may still support chip demand, but it also raises questions about free cash flow, funding needs and how much of the future is already embedded in valuations,” he said.
Some clues may come later Wednesday with results from Tesla and Google parent Alphabet, followed by fellow tech bellweathers Microsoft, Meta, Apple and Amazon next week.
Brent crude moved up around one per cent to northwards of US$92, the highest intraday price since June 11, as President Donald Trump said the United States was “not finished” attacking Iran.
The US military said it completed an 11th consecutive night of <a href="https://absafricatv.com/trump-plans-to-strike-a-new-nuclear-site-in-iran-2/” title=”Trump plans to strike a new nuclear site in Iran”>strikes to “further degrade Iran’s ability to threaten commercial shipping in the Strait of Hormuz”.
Trump also said he would “take care of” Yemen’s Iran-backed Houthi rebels if they followed through on a threat on Monday to blockade Saudi Arabia’s ports.
“Our view is that we’ll be kind of in this US$80 to US$90 range, depending on the news flow,” said Jay Hatfield at Infrastructure Capital Management said of the oil price.
“If we actually have a closed Red Sea, that’s a threat. We haven’t seen that yet. That could shoot us over US$100,” Hatfield told Bloomberg News.
On currency markets, the Japanese yen was under pressure again after falling below 163 against the dollar late Tuesday, its weakest since 1986, in part due to the oil price.
