By Wayne Cole
SYDNEY (Reuters) -Asian stock markets resumed their ascent on Thursday as investors doubled down on all things AI-related, while gold held atop $4,000 and the dollar retained its recent hefty gains.
Oil prices dipped as geopolitical tensions eased a little on news that Israel and Hamas had agreed to the first phase of a ceasefire plan to end the two-year conflict.
U.S. President Donald Trump said he might travel to Egypt this weekend to discuss further steps in the deal.
In equity markets, a resumption of the bull run in AI-related tech saw the S&P 500 and Nasdaq reach record highs as funds were again rewarded for buying the dips.
“The AI Theme remains intact as we see another stream of multi-$bn investment come into the space,” wrote analysts at JPMorgan in a note.
“Investors can talk all they want about the ‘circularity’ of this AI investment cycle, but these daily headlines are being rewarded with strength until proven otherwise.”
They noted estimates for earnings growth in the tech sector had risen to 20.9% for the looming reporting season, from 15.9% back in June. Some 81% of the stocks in the tech sector have seen estimates increase, led by Nvidia and Apple.
Earnings overall are expected to grow 8% for the third quarter, with revenue up 6.3%.
A jump in tech pushed Japan’s Nikkei up 1.4% and back toward all-time peaks. Data showed offshore funds bought a net 2.5 trillion yen ($16.40 billion) worth of Japanese shares in the week through October 4.
Stocks in Taiwan climbed 1.2% to a fresh record, while MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.3%.
Chinese blue chips added 0.4% as they reopened from a week-long holiday.
Beijing announced new restrictions on the export of rare earth minerals and equipment that have been a sticking point in trade talks with the United States.
S&P 500 futures and Nasdaq futures steadied after Wednesday’s gains. EUROSTOXX 50 futures eased 0.2% as did FTSE futures and DAX futures.
FED STILL SEEN CUTTING
Bond markets were largely unruffled by minutes of the last Federal Reserve meeting that showed a majority of members cautioned about upside risks to inflation even as they sanctioned an easing in policy.
Futures continue to imply a 94% chance of another quarter-point cut in November, and have 44 basis points of easing priced in by year-end.
“While most Fed officials want to cut further, some participants want to approach further cuts with caution,” economists at Citi wrote in a note.
“We expect that further labour market weakening will push most Fed officials to support cutting the policy rate at each of the next four meetings.”
Yields on 10-year Treasuries were down a fraction at 4.115%, having also shrugged off a middling auction of new notes on Wednesday.
In currencies, the dollar held near eight-month highs on the yen at 152.54, having surged 3.5% so far this week amid concerns about more Japanese government borrowing.
The euro steadied at $1.1641, after touching a six-week low of $1.1598 overnight when data showed German industrial output suffered the biggest monthly fall in over three years in August.
Gold eased 0.2% to $4,031 an ounce, but remains 3.9% higher on the week so far. The metal has been buoyed by the prospect of a series of U.S. rate cuts, along with investor demand for assets that cannot be debased by governments and buying by central banks for reserves.
There is also in part a desire to hedge against the risk of a sustained decline in the U.S. dollar and a selloff in bond markets as governments need to borrow ever more. [GOL/]
Oil prices slipped as news of the Israel-Hamas ceasefire lessened one potential threat to supplies. [O/R]
Brent dropped 0.6% to $65.89 a barrel, while U.S. crude eased 0.7% to $62.12 per barrel.
($1 = 152.4800 yen)
(Reporting by Wayne Cole; Editing by Jacqueline Wong)
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