-- Most Asian stocks rose on Wednesday on an extended rebound in the technology sector as investors awaited key earnings from some of the biggest companies in the world.
Tech stocks also benefited from bargain hunting after clocking steep losses so far in April, following underwhelming earnings from major chipmakers and increased fears of higher-for-longer interest rates.
This was especially prevalent in Wall Street over the past two sessions, which saw U.S. stock benchmarks surge tracking a rebound in tech. U.S. stock index futures rose in Asian trade on Wednesday.
Asian tech rebounds, key US earnings awaited
Tech-heavy bourses were the best performers in Asia on Wednesday, with Japan’s index up 2%, while South Korea’s rallied 1.9%.
Gains in major internet stocks also put Hong Kong’s up 1.1%, helping it avoid broader weakness in Chinese markets.
Chinese electric vehicle stocks were marginally positive, tracking a bounce in Tesla Inc (NASDAQ:) even as the carmaker clocked disappointing earnings and flagged accelerated plans to develop cheaper EV models- a trend that heralds more competition in the sector.
Regional tech stocks tracked a rebound in their U.S. peers ahead of earnings from some of the world’s biggest tech firms due in the coming days. Facebook owner Meta Platforms Inc (NASDAQ:) will report its first-quarter earnings on Wednesday, while giants Microsoft Corporation (NASDAQ:) and Alphabet Inc (NASDAQ:) will report their earnings on Thursday.
Buying into tech was fueled by growing hopes that positive earnings from the sector will justify the massive melt-up in valuations seen over the first quarter of 2024.
Asian chipmakers rally, AI hopes persist
Major Asian chipmaking stocks were the best performers in the tech sector on Wednesday, rebounding sharply from recent losses on hopes that positive tech earnings will signal strong demand for artificial intelligence.
Strong earnings from Texas Instruments (NASDAQ:) also factored into optimism towards chipmakers.
Japan’s (TYO:), (TYO:) and (TYO:) surged between 3.5% and 10%, while South Korea’s (KS:) and (KS:) added 3.4% and 5.2%, respectively.
TSMC (TW:) (NYSE:)- the world’s biggest contract chipmaker- surged 3.6%, tracking an overnight bounce in NVIDIA Corp (NASDAQ:), which is among the firm’s biggest customers. A recent rout in chip stocks was in part triggered by TSMC, after the firm warned that AI demand may not be enough to offset a broader decline in the chip industry.
Most broader Asian markets advanced on Wednesday, albeit at a slower pace. China’s and traded marginally higher, lagging their peers amid resurgent doubts over an economic recovery in the country.
Australia’s added 0.3%, having trimmed a bulk of its initial gains after data showed grew more than expected in the first quarter. The reading gives the Reserve Bank of Australia more impetus to keep interest rates higher for longer.
Japan’s broader index added 1%, with export-oriented stocks benefiting from weakness in the ahead of a meeting this Friday.
Futures for India’s index pointed to a positive open, with the index remaining in sight of record highs hit earlier in April.
