© Reuters.
Investing.com– Most Asian stocks rose on Thursday as major technology shares tracked a rebound in their U.S. peers, while Japan’s Nikkei 225 neared record highs even as the economy unexpectedly entered a recession.
But while Japanese markets shone, gains across broader Asia were a lot more subdued, as risk aversion still remained in play amid waning bets on early interest rate cuts by the Federal Reserve.
Regional markets took a positive lead-in from Wall Street, with U.S. stock benchmarks closing higher overnight as persistent hype over artificial intelligence and some strong earnings drove gains in heavyweight tech shares.
, and futures edged lower in Asian trade. Analysts said that U.S. stocks were likely due for more losses after Tuesday’s hotter-than-expected inflation data.
Nikkei 225 near record highs as Q4 recession muddles BOJ rate hike bets
The rose 0.7% to 37,982.50 points- a 34-year high. The index was also within spitting distance of a record-high 38,915 points last seen in 1989.
Gains in the Nikkei were fueled largely by heavyweight tech stocks, with chipmakers and chip-adjacent stocks logging strong gains on AI hype. Tech investor SoftBank Group Corp. (TYO:) rose 2.4% to a near three-year high, while chip testing equipment maker Advantest Corp. (TYO:) rose 1.6% and Tokyo Electron Ltd. (TYO:)- Japan’s most valuable chipmaker- added nearly 4%.
The broader fell 0.1%.
Data released earlier in the day showed Japan’s unexpectedly shrank in the December quarter, as private consumption was battered by high inflation and a weak yen. The reading showed Japan entering a technical recession, after logging two straight quarters of GDP declines.
But the recession fueled bets that the Bank of Japan will further delay raising interest rates from ultra-low levels- a trend that heralds an extended period of easy monetary conditions for Japanese markets. This trend was a key driver of Japan’s stock rally over the past two years.
Other Asian markets also rose on strength in the tech sector. Hong Kong’s index added 0.5% as a Bloomberg report showed that Michael Burry- who had famously called the 2008 subprime mortgage crisis- increased his holdings of tech heavyweights JD.com (NASDAQ:) (HK:) and Alibaba Group (NYSE:) (HK:).
South Korea’s edged up 0.1%. Indonesian stocks were the best performers for the day, with the surging 1.3% after Defence Minister Prabowo Subianto appeared poised to win the country’s presidency.
Australia’s added 0.7% as data showed that the in January, which gives the Reserve Bank less impetus to hike interest rates further. But gains on the ASX were held back by a 2.3% drop in heavyweight miner BHP Group Ltd (ASX:), after it flagged a staggering $5.7 billion impairment charge on its Brazil operations and Australian nickel business.
Futures for India’s index pointed to a muted open, although local tech heavyweights appeared likely to track gains in their U.S. peers.
