Asian equities saw gains, particularly in technology shares, following a rally in US info-tech stocks. This rise coincided with an increase in oil prices after the US and Iran exchanged attacks involving tankers in the Strait of Hormuz. The MSCI Asia Pacific index advanced 1.1%, with South Korean chipmakers SK Hynix Co. and Samsung Electronics Co. being significant contributors. This Asian surge followed a 0.2% rise in the Nasdaq 100 Index and a 3.4% jump in the Philadelphia Semiconductor Index on Wall Street, despite most US shares declining due to strong payroll numbers boosting expectations for a Federal Reserve interest-rate hike.
Optimism surrounding OpenAI's announcement of its new GPT-6 technology, positioned as a major step towards artificial general intelligence, was cited by Kim Namho, a fund manager at Timefolio Investment Management, as a primary driver for the gains in Korean chipmakers. Meanwhile, Brent crude rose by as much as 0.8% to nearly $97 a barrel, and West Texas Intermediate traded around $92. European natural gas prices also climbed up to 4.2%. These oil price increases were a direct result of the US striking three Iranian oil tankers and Iran's subsequent threat to declare a new restricted zone outside the Strait of Hormuz.
The increase in oil prices and Friday's stronger-than-expected US payroll data have intensified focus on upcoming US inflation data, which could influence the Federal Reserve's decision on interest rates. Elias Haddad, global head of markets strategy at Brown Brothers Harriman, noted that a Fed rate hike on September 16 "hinges on Friday's US August CPI print." A high CPI could seal a September hike and strengthen the US dollar, while a cooler reading might support a hold and weaken the dollar. In currency markets, the yen edged higher amid speculation that Japan's Government Pension Investment Fund might increase domestic asset allocations and potential interest-rate hikes by the Bank of Japan, strengthening as much as 0.3% to 155.80 per dollar.
Other notable market movements included China's injection of 300 billion yuan ($45 billion) into its largest banks and insurers to bolster its financial system amidst slowing economic growth. In specific index performances, S&P 500 futures fell 0.1%, Nikkei 225 futures rose 1.7%, Japan's Topix increased 0.6%, while Hong Kong's Hang Seng fell 1% and the Shanghai Composite dropped 0.2%. The Bloomberg Dollar Spot Index was little changed, and Bitcoin fell 0.2% to $79,792.76. Japan's 10-year yield advanced 1.5 basis points to 2.915%, and spot gold fell 0.5% to $4,408.24 an ounce.
