Asian markets were subdued yesterday, as the extended Lunar New Year holiday approached and Japan reported lackluster economic growth.
The holiday period meant that trading floors were closed in Shanghai, Seoul and Taipei. Hong Kong and Singapore closed after half-day sessions.
US markets were also closed for Presidents’ Day.
Photo: AP
Limp GDP growth in Japan rattled the post-election high of Japanese Prime Minister Sanae Takaichi following her recent landslide win.
On a quarterly basis, the world’s fourth-biggest economy expanded just 0.1 percent in the final quarter of last year, the Cabinet Office reported.
The figures — which undershot market forecasts of 0.4 percent — add pressure on Takaichi, who made boosting economic growth a key pledge ahead of her landslide victory in the Feb. 8 snap election.
Japan’s economy expanded at an anemic 0.2 percent annual pace last quarter, the data showed, with growth for all of last year at just 1.1 percent.
Tokyo closed 0.2 percent down, while Hong Kong rose 0.5 percent as trading closed early for Lunar New Year. Wellington, Jakarta and Manila posted marginal losses, while Sydney, Mumbai and Bangkok were up. Singapore and Kuala Lumpur were little changed.
Markets showed signs of stabilizing after a tech-led plunge last week, when traders reacted to growing concern about the hundreds of billions spent on artificial intelligence (AI) infrastructure and when, if ever, they might see a return on them.
Investors will keep an eye on artificial intelligence this week as the five-day AI Impact Summit began in New Delhi yesterday, with the likes of OpenAI CEO Sam Altman and Google CEO Sundar Pichai in attendance.
While frenzied demand for generative AI has turbocharged profits and share prices for many technology companies, anxiety is growing over the risks that it poses to society and the environment.
The sense of calm continued from Friday, when government data showed consumer inflation in the US last month cooling slightly more than expected.
Analysts say the figure allows the US central bank to cut interest rates again later this year, but warn that policymakers need to see sustained improvement to do so.
“US inflation data was good. And the initial response in equities reflected that. But the devil was in the details,” Capital.com senior financial market analyst Kyle Rodda said. “Annual headline and core inflation dropped to new lows, with the critical core number falling to the lowest level since March 2021 at 2.4 percent.”
Elsewhere, gold crept above US$5,000 an ounce after Friday’s climb following softer US inflation. Silver was down 0.7 percent.
“Markets have priced in a higher probability of deeper Fed rate cuts this year, driving real yields lower and supporting gold demand,” Standard Chartered PLC said in a note. “We expect gold to remain well-supported.”
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
RATIONING: The proposal would give the Trump administration ample leverage to negotiate investments in the US as it decides how many chips to give each country US officials are debating a new regulatory framework for exporting artificial intelligence (AI) chips and are considering requiring foreign nations to invest in US AI data centers or security guarantees as a condition for granting exports of 200,000 chips or more, according to a document seen by Reuters. The rules are not yet final and could change. They would be the first attempt to regulate the flow of AI chips to US allies and partners since US President Donald Trump’s administration said it rescinded its predecessor’s so-called AI diffusion rules. Those rules sought to keep a significant amount of AI
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
A new worry has been rippling across the stock market lately: Entire businesses, not just their employees, might be thrown out of work. While most economists say fears of an artificial intelligence (AI) job apocalypse are overblown, seismic shifts have happened in the past after big tech breakthroughs. The IT revolution of the 1990s led to a surge in productivity that sped up the US economy for several years. It also rendered companies or even industries largely redundant — from travel agents and stockbrokers to classified advertising and newspapers, or video rental stores. Economists expect AI would deliver higher productivity,
RSS