Trading volumes in the region were subdued due to Lunar New Year holidays in Hong Kong, China, and Taiwan, but MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.4%, and Tokyo’s Nikkei gained 0.7%. South Korea’s Kospi surged more than 3% to a record high, reflecting optimism in the tech sector following developments in the United States.
The rally was partly fueled by news from Nvidia Corporation, which announced a multi-year deal to supply Meta Platforms with millions of current and future artificial intelligence chips. Market analyst Tony Sycamore of IG said the deal provided “badly needed good news” for a tech sector that had seen a steep selloff earlier this month, potentially setting up a positive run into Nvidia’s earnings next week.
European markets were expected to open mixed, with EUROSTOXX 50 futures down 0.11%, FTSE futures up 0.15%, and DAX futures easing 0.3%. In the U.S., Nasdaq futures rose 0.17% and S&P 500 futures edged 0.11% higher.
Oil and Gold React to Geopolitical Risks
Oil prices extended gains after sharp rises in the previous session, as investors priced in potential supply disruptions amid escalating U.S.-Iran tensions. Brent crude was up 0.16% at $70.46 per barrel, while U.S. crude rose 0.25% to $65.35. Michael Every, senior global strategist at Rabobank, warned that any U.S. strike could extend over weeks rather than ending quickly, keeping markets on alert.
Gold maintained safe-haven support, trading steadily at $4,998.18 an ounce, reflecting investor caution in the face of geopolitical uncertainty.
Dollar Strengthens on Fed Signals
The dollar firmed following stronger-than-expected U.S. economic data and minutes from the Federal Reserve’s January meeting, which indicated policymakers were in no rush to cut rates and could consider further hikes if inflation remains elevated.
Against the greenback, the British pound fell to near a one-month low at $1.34816, while the Japanese yen slipped to 155.26 per dollar. Charlie Ripley, senior investment strategist at Allianz Investment Management, said the Fed minutes reinforced expectations that rate cuts are unlikely in the near term, emphasizing that disinflation may proceed more slowly than markets anticipate.
The euro struggled below $1.18, last trading at $1.17915, amid reports that Christine Lagarde plans to leave her role early. The New Zealand dollar edged up 0.07% at $0.5970, following a sharp 1.4% drop in the previous session after the Reserve Bank tempered expectations for a hawkish policy shift.