By Kevin Buckland
TOKYO (Reuters) -Stocks rose across most of Asia on Thursday, with the chip sector buoyant following a strong rally among U.S. peers overnight and a robust start to Wall Street’s earnings season also lifting the mood.
At the same time, simmering trade frictions between Beijing and Washington increased the appeal of safe havens such as gold – which renewed a record high – and undercut the dollar.
Crude oil rose from five-month lows after U.S. President Donald Trump said Indian Prime Minister Narendra Modi had pledged his country would stop buying oil from Russia, which supplies about one-third of its imports.
Japan’s Nikkei advanced 1.2%, with chip- and artificial intelligence-related shares boosting the index.
The momentum increased after Taiwanese chipmaker TSMC reported record earnings, while also benefiting from political developments that put fiscal dove Sanae Takaichi’s bid to become Japan’s prime minister back on track.
Taiwanese share trading was already closed at the time of TSMC’s announcement, ending the day up 1.4% and reaching a record.
South Korea’s KOSPI jumped 2.2% to its own record peak after the country’s chief presidential policy adviser said he was “optimistic” about ongoing talks to finalise a trade deal with the U.S.
Australia’s equity benchmark added 0.9% and also reached a record high with poor jobs data raising the odds of central bank easing.
However, Hong Kong’s Hang Seng fell 0.7% and mainland Chinese blue chips were flat in a volatile session as investors pondered the path of trade ties with the U.S.
European stock futures pointed 0.3% lower.
U.S. stock futures were overall flat following a 0.4% gain for the S&P 500 and a 0.6% rise for the tech-heavy Nasdaq overnight. The Philadelphia SE Semiconductor Index surged 3%.
“I remain of the belief that the longer-run path of least resistance continues to point firmly to the upside” for equities, said Michael Brown, senior research strategist at Pepperstone.
“Though conditions have been choppy, I’d argue strongly that this is another of those occasions where the intraday price action largely represents noise.”
GOLD SURGE CONTINUES, DOLLAR DIPS
Optimism over the AI narrative and signs of economic strength from robust U.S. bank earnings stole the spotlight for stock investors, even with Trump pronouncing late Wednesday that the U.S. is “in a trade war with China” – confirming what markets had already concluded from recent comments from both sides.
Gold rose as much as 0.8% in the latest session to reach an unprecedented $4,241.77 per ounce.
The dollar sagged for a third straight session, dropping 0.1% against a basket of major peers.
It slipped as much as 0.4% to 150.51 yen, putting the psychologically key 150 line briefly in focus, although the pair bounced back to be flat ahead of the open of European markets.
Part of that retracement came following news that ruling Liberal Democratic Party leader Takaichi was in talks with one of the opposition parties – the right-leaning Japan Innovation Party – for a partnership aimed at securing enough parliament votes to win the premiership in a vote likely to take place next week.
The euro added 0.1% to $1.1657, and sterling rose 0.1% to $1.3412.
There were some hopeful signs of calming trade tensions, with U.S. Treasury Secretary Scott Bessent saying an extension of the current tariff reprieve was possible, and that Trump still expected to meet Chinese leader Xi Jinping in South Korea later this month.
“The brinkmanship between the U.S. and China hasn’t dissipated yet,” said Kyle Rodda, senior financial markets analyst at Capital.com.
“It will only simmer down completely when the Chinese back off the threat of rare earth export curbs and the U.S. reverse the tariff hike to 100% slated for November 1. Until then, trepidation will remain in the markets.”
Trump’s trade manoeuvres also lifted oil off five-month lows, with Brent crude futures up 0.8% at $62.41 a barrel and U.S. West Texas Intermediate (WTI) futures adding 0.9% to trade at $58.77.
On Wednesday, the U.S. president said India would halt oil purchases from its top supplier Russia, and Washington would next try to get China to do the same as it intensifies efforts to cut off Moscow’s energy revenues and pressure it to negotiate a peace deal in Ukraine.
(Reporting by Kevin BucklandEditing by Shri Navaratnam)
