A global AI sell-off eased on Monday, with US technology stocks set to open higher after a bruising rout last week. Futures for the tech-heavy Nasdaq 100 index and the broad-based S&P 500 rose 0.9 per cent and 0.5 per cent, respectively, during Asian trading ahead of the Wall Street open. The rise came after the Nasdaq 100 fell 3.5 per cent on Friday, logging its worst month in more than a year in October. The Philadelphia Semiconductor Index, which tracks the major US chip companies, tumbled 7.2 per cent.
“The sell-off that we saw on Friday is decoupled from the fundamental picture,” said Ecaterina Bigos, senior market strategist at BNP Paribas Asset Management. In Asia, shares of the chipmakers supplying AI data centres were mixed. SK Hynix and Samsung Electronics, the two biggest makers of memory chips, gained 5.4 per cent and 3 per cent, respectively, driving South Korea’s benchmark Kospi up 2.8 per cent. But shares of TSMC, the world’s biggest contract chipmaker, declined 1.5 per cent. Japanese memory-chip maker Kioxia slumped 15.5 per cent after its profit outlook on Friday fell short of expectations.
“What we are witnessing is structural uncertainty about the AI build-out expressing itself through episodic panic,” wrote Ajay Rajadhyaksha, global chair of research at Barclays, in a note on Sunday. In China, the CSI 300 index rose 0.8 per cent and the tech-focused Star 50 jumped 3 per cent after reports that the central bank and the securities regulator were holding discussions with banks and brokerages about supporting capital markets. The country’s stock markets have been in a prolonged downturn since July amid weak consumer confidence and faltering enthusiasm for some of the country’s technology stocks. BNP’s Bigos added that investors were cautious heading into the US midterm elections this week, noting that relatively low liquidity in markets was magnifying price swings.
Energy markets fell during early trading in Asia, with Brent crude, the international oil benchmark, falling 3.1 per cent to $109.96 a barrel. “Over the last nine days or so we have seen Qatar as well as Saudi Arabia going to Tehran to discuss matters,” said Anthony Yuen, head of energy strategy at Citigroup. “The negotiations as well as some profit-taking are bringing prices down.” Nonetheless, Goldman Sachs raised its end-of-year target price for Brent from $90 a barrel to $105 on risks that the war in Iran would flare up following the midterm elections.
Source: Financial Times Markets · Summarized by HeadlinesBriefing