HONG KONG – Stocks mostly rose yesterday as investors brushed off another tech-fuelled sell-off on Wall Street, while precious metals continued their recovery on dip-buying following a two-day collapse.
Oil prices also extended gains on a fresh pick-up in US-Iran tensions after an American jet shot down an Iranian drone in the Middle East, just as the two sides prepared to hold key nuclear talks.
Assets across the board have endured a volatile start to February owing to a surge in the dollar, geopolitical tensions and the possibility of another US government shutdown.
Concerns over artificial intelligence have also kept traders on their toes amid questions over the vast sums invested in the sector and warnings of a bubble that could pop at any time.
The latest flare-up occurred in New York, where markets were spooked by news that AI startup Anthropic, which created the Claude chatbot, had disclosed a tool that firms could use to perform legal work.
The announcement hit firms in the software, financial services, and asset management industries. Downbeat sales projections from Advanced Micro Devices compounded the darker mood.
Tech firms across Asia declined, while broader markets fluctuated between gains and losses. Hong Kong, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei, and Bangkok rose, but Tokyo, Manila, and Mumbai slipped.
The mixed day signaled a return to stability after two days of sharp swings sparked by AI concerns and Donald Trump’s hawkish pick to lead the Federal Reserve, which dampened bets on interest rate cuts.
Precious metals rose for a second day, after tanking on Friday and Monday as the US president’s tapping of Kevin Warsh, a former Fed governor, sent the dollar surging.
The greenback had been taking a battering for most of last week on worries that Trump was happy to have a weaker currency.
Gold was sitting just above US$5 070 an ounce and silver around US$89, both well off last week’s record highs of US$5 595 and US$121 but up from the lows of US$4 597 and US$71 seen in the past two days.
“Investors and traders are dipping their toes in the waters after the clear-out of a lot of the froth and leveraged speculative positions,” said Saxo Markets’ Neil Wilson.
This “A) might give them confidence that perhaps the worst of the volatility is over; and B) prices had plunged so much so fast they think it’s worth a go at these levels.
“A lot of people sitting on the sidelines for months, feeling every day they’d missed their chance to get in, will be part of this renewed wave of buying.”
Oil prices rose after it emerged that a US fighter jet had taken out an Iranian drone that approached an aircraft carrier on Tuesday.
That was the second clash that day between the two in Middle Eastern waters, after Iranian forces attempted to detain a US-flagged tanker in the Strait of Hormuz.
The incidents come after Washington and Tehran agreed to talks despite Trump’s repeated threat of military action against Iran. Iran’s warning that it would respond with strikes on US vessels and bases.
White House spokeswoman Karoline Leavitt told Fox News that US envoy Steve Witkoff is still expected “to have conversations with the Iranians late this week”.
Traders were cheered by news that Trump had signed into law a congressional spending bill to fund government agencies while buying more time for lawmakers to negotiate over the administration’s controversial immigration crackdown.
Nampa/AFP