Asian equities experienced a decline as investor focus centered on the artificial intelligence sector and upcoming events, including Nvidia's earnings report and the Federal Reserve's annual gathering. MSCI's Asia Pacific equities gauge slipped 0.2%, with tech shares leading the losses. South Korea's Kospi Index, considered a bellwether for AI investments, fell by 1.4% after Samsung Electronics announced a $80 billion shareholder-return plan, which was less than anticipated by some investors. This decline contributed to a broader weakness in technology stocks globally.
Several factors amplified concerns within the tech sector. Alibaba Group announced a HK$80 billion ($10.2 billion) share sale to bolster its global AI leadership ambitions, offering shares at a 3.6% discount. SoftBank Group also plans a record 1 trillion yen ($6.3 billion) retail bond offering to fund its OpenAI investments. Furthermore, Nvidia notified customers about price hikes on AI-related systems, including its flagship Vera Rubin and Grace Blackwell chips, effective early next year. These developments sparked worries about the sustainability of the AI spending boom, given rising hardware costs.
In the broader market, MSCI's global equities gauge fell 0.40% to 1,145.23, largely due to weakness in technology stocks. However, other sectors showed resilience, supported by a dip in US Treasury yields and falling oil prices. The Dow Jones Industrial Average rose by 0.26% to 53,417.16, while the S&P 500 fell 0.28% to 7,652.86 and the Nasdaq Composite dropped 0.76% to 25,980.19. Oil prices saw a decline, with US crude settling down 2.35% at $85.01 per barrel and Brent crude down 2.35% at $92.17 per barrel.
Conversely, gold prices surged, reaching their highest levels in over three months. Spot gold rose 0.97% to $4,647.29 an ounce, with US gold futures increasing by 1.01% to $4,670.90 an ounce. This rally was attributed to technical buying, the US Treasury's recent buyback announcement, and a weaker dollar ahead of inflation data and the Jackson Hole meeting. The yield on 10-year Treasuries declined four basis points to 4.70%, further influencing market sentiment.
