Key Takeaways
- Asian stock markets gained as US technology firms announced significant capital spending plans.
- Oil prices reached six-week highs amid ongoing conflicts in the Middle East, raising inflation concerns.
- Brent crude futures rose to $96 per barrel following strikes on Iran and attacks on oil tankers.
Asian stock markets saw a rise on Thursday as U.S. technology firms reported significant capital spending plans that are expected to benefit chipmakers in the region, according to market analysts.
The search giant Alphabet raised its capital expenditure plans for the year and now expects to spend between $195 billion and $205 billion, leading South Korea’s KOSPI up more than 3%, driven by SK Hynix and Samsung Electronics. Japan’s Nikkei also saw a gain of 1%.
The broader MSCI Asia-Pacific index gained about 1% in early trading, set for a 3% rise for the week after two consecutive weeks of losses.
Thierry Wizman, global FX & rates strategist at Macquarie Group, stated that rising oil prices have renewed concerns about their impact on global growth. The conflict in the Middle East has depleted global stockpiles and stoked inflation worldwide.
Brent crude futures rose 2% to $96 per barrel following U.S. strikes on Iran and attacks by Yemen’s Houthis on oil tankers, widening the scope of a conflict that has cast a shadow over global markets.
The war in the Middle East has raised worries about global growth, with analysts warning that the closure of both the Strait of Hormuz and Bab el-Mandeb could disrupt shipping routes for more than a quarter of the world’s oil and gas.
Gary Tan, portfolio manager at Allspring Global Investments, noted that stronger cloud growth is validating higher AI capital expenditure (capex), reinforcing the hyperscaler spending cycle. He emphasized that AI is rapidly moving from infrastructure to disruption, with hyperscalers increasingly using AI to challenge incumbent platforms across search and e-commerce.
Nick Twidale, chief market strategist at ATFX Global in Sydney, commented that while good earnings news will continue to support Asian markets, the escalating conflict in the Middle East could lead to a cautious trading session ahead.
In currency markets, the Japanese yen remained near 40-year lows. Bloomberg News reported that Bank of Japan officials were open to raising interest rates at a faster pace, causing the yen to slip further.
The rise in oil prices had renewed concern about the impact on global growth.
Thierry Wizman, Global FX & rates strategist at Macquarie Group
The bigger takeaway is that AI is rapidly moving from infrastructure to disruption, with hyperscalers increasingly using AI to challenge incumbent platforms across search and e-commerce.
Gary Tan, Portfolio manager at Allspring Global Investments
