Asian stocks rally as Nikkei 225 rises on Oracle-led AI optimism

Asian stocks gain ground as soft US PPI data firmed a Fed rate cut in September.
Oracle’s forecast that AI will drive demand for its cloud services, which lifted AI-linked shares in Asia.
The Nikkei 225 receives support as exports accelerate to the US ahead of new 15% tariffs.

Akhtar Faruqui FXStreet

Asian stocks rise on Thursday, following Wall Street’s overnight rally, driven by softer-than-estimated US Producer Price Index (PPI) data and a strong forecast from Oracle. Traders now await the August US Consumer Price Index (CPI), due later in the day, which could strengthen expectations for a larger 50-basis-point Fed rate cut next week.

Japan’s Nikkei 225 rises 0.66% to trade near 44,100 at the time of writing, while South Korea’s KOSPI advances 0.40% to move above 3,300, and Hong Kong’s Hang Seng steadies near 26,200. Additionally, China’s Shanghai Composite advances 1.05% to reach 3,850, while the Shenzhen Component gained 2.60%, rising to nearly 12,900.

Asian markets rally as tech stocks advance, boosted by Oracle’s forecast that AI will drive demand for its cloud services. The momentum lifted AI-linked shares across the region, with SoftBank jumping 9% in Tokyo after Oracle surged 36%, its biggest one-day gain since 1992, bringing the 48-year-old firm close to a $1 trillion valuation, per Reuters.

The Nikkei 225 received support after surveys showed business sentiment in Japan improved in the third quarter, boosted by a rebound in exports as firms accelerated shipments to the US ahead of new 15% tariffs.

Chinese markets surge, including Hang Seng rebounds toward four-year highs as deflationary pressures linger in China. Additionally, August consumer prices recorded the steepest decline since February, and producer prices contracted for a 35th straight month. Shanghai Composite and Shenzhen Component surge as Chinese technology stocks rallied on AI optimism.

South Korea’s KOSPI extends gains to a new record high, led by large-cap tech and semiconductor stocks tracking Wall Street’s AI-fueled rally. Hanwha Aerospace rose 3.31% and SK Hynix gained 1.97%, while Samsung Electronics surged 0.41% at the time of writing.

AsianStocks FAQs

Which are the main stock market indices in Asia?

Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.

What are the main sectors represented in Asian stock markets?

Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.

What factors drive Asian stock markets?

Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.

What are the risks of investing in Asia stock markets?

Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

GBP/USD hangs close to 1.3500, awaits fresh impetus from US CPI

GBP/USD keeps its range around 1.3500 in Wednesday's European trading. The pair continues to trade with caution as the US Dollar (USD) holds ground ahead of a crucial US consumer inflation report. Investors are watching this upcoming reading closely, as it is expected to play a major role in shaping the Federal Reserve’s next interest rate decision and the USD valuation.

EUR/USD consolidates below 1.1550 ahead of US CPI

EUR/USD struggles to gain any meaningful traction and holds steady around 1.1550 in the European trading hours on Wednesday, maintaining a familiar range held over the past week or so. Traders keenly await the release of the key US inflation data and further developments surrounding the Middle East crisis before placing fresh directional bets.

Gold retakes $4,400, eyes two-month high as traders look to US CPI for Fed hike cues

Gold attracts fresh buyers during the Asian session on Wednesday and climbs back above the $4,400 mark, closer to its highest level since June 5, which was touched the previous day. Traders now look to the US Consumer Price Index report for more cues about the US Federal Reserve's future policy path amid inflation risks stemming from volatile oil prices.

Zcash below $500 puts bulls under pressure, 100-day EMA in focus

Zcash price trades below $500 at press time on Wednesday, holding steady after two consecutive days of losses. Retail demand for the privacy coin is mixed as the broader market awaits the release of US Consumer Price Index data for July later in the day.

US CPI data set to show softer inflation in July as markets reassess Fed rate hike bets

The US Bureau of Labor Statistics will publish the July Consumer Price Index data on Wednesday. The report is expected to show a small decline in consumer inflation and core inflation. The monthly CPI is forecast to rise by 0.1%, following the 0.4% decrease recorded in June, while the annual reading is seen retreating to 3.4% from 3.5% reported in the previous month.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.