Asian shares experienced a notable rise on Monday, largely driven by the technology sector. This uptick was fueled by the ongoing demand for artificial intelligence, which buoyed chipmakers across the region. South Korea's Kospi index climbed 1.7% to 7,007.72, with Samsung Electronics jumping 5% and SK Hynix gaining 0.6%. Taiwan's Taiex also increased by 1.1%, with TSMC adding 0.8%. Hong Kong's Hang Seng advanced 0.9% to 24,975.58, and the Shanghai Composite index gained 1% to 3,949.91. India's Sensex rose 0.7%. Even with American tech leaders calling for a slowdown in AI development, investor optimism for AI-related stocks remained high. Japan's Nikkei was closed but futures rose 0.5%.
The positive market sentiment was further bolstered by successful preliminary trade talks between the U.S. and China. Treasury Secretary Scott Bessent described discussions with Chinese Vice Premier He Lifeng as "very successful," ahead of an anticipated meeting between President Donald Trump and Chinese leader Xi Jinping. These talks are expected to cover trade, AI, and geopolitics, with discussions including potential reciprocal tariff reductions on $30 billion worth of goods from each side.
Meanwhile, oil prices saw a decline, easing some market pressures. Brent crude, the international standard, fell 2.1% to $101.65 per barrel, while benchmark U.S. crude lost 2.3% to $93.86 per barrel. This dip was attributed to hopes that Saudi Arabia could increase supplies and an improvement in vessel traffic through the Strait of Hormuz, despite ongoing tensions between the U.S. and Iran and a Houthi attack on Riyadh. Gold prices also traded under pressure. The U.S. dollar strengthened against the Japanese yen, reaching 157.25 yen from 156.81 yen, while the euro dipped slightly to $1.1473.
Bond markets remained a point of tension, with the yield on the U.S. 10-year Treasury hitting 5% and then settling around 4.97% early Monday. The Federal Reserve's recent interest rate hike, the first in three years, and the Bank of Japan's rate increase to a 31-year high contributed to the bond market's unease. Despite this, U.S. futures were higher, with S&P 500 futures firming 0.3% and Nasdaq futures adding 0.4%. EUROSTOXX 50 and DAX futures both rose 0.2%.
