Asian shares advance, tracking Wall St rally led by Nvidia

Tokyo: Asian shares were higher after a rally on Wall Street that was led by computer chip giant Nvidia. US futures edged lower and oil prices rose as media reports said the likelihood was rising of conflict with Iran. US President Donald Trump has been weighing whether to take military action against Iran as his administration surges military resources to the region while holding indirect talks with Tehran over its nuclear program. That is raising concerns that any attack could spiral into a larger conflict in the Middle East.

Markets in Greater China were closed for Lunar New Year holidays, while some others reopened for trading. In Tokyo, the Nikkei 225 added 0.8 per cent to 57,582.93, while in South Korea, the Kospi jumped 2.8 per cent to 5,661.22 as markets reopened following holidays earlier in the week.

Australia’s S&P/ASX 200 advanced 0.9 per cent to 9,088.70. Southeast Asian markets surged, with Thailand’s SET up 0.9 per cent. India’s Sensex edged 0.1% higher. During European trading Wednesday, London’s FTSE 100 climbed 1.2 per cent after the latest update on UK inflation bolstered expectations that the Bank of England may soon cut interest rates.

On Wall Street, the S&P 500 rose 0.6 per cent to 6,881.31 and the Dow Jones Industrial Average added 0.3 per cent, to 49,662.66. The Nasdaq composite gained 0.8 per cent to 22,753.63. Nvidia helped lift the market and climbed 1.6 per cent after Meta Platforms announced a long-term partnership where it will use millions of chips and other equipment from Nvidia for its artificial-intelligence data centers.

“No one deploys AI at Meta’s scale,” Nvidia CEO Jensen Huang said. Because his company is the most valuable on Wall Street, Nvidia’s stock was the single most powerful force pulling the S&P 500 higher.

That performance demonstrated the upside of AI development for the US stock market. But investors have also focused on the potential downsides recently, which has led to sharp swings in share prices. Meta’s stock fell as much as 1.7 per cent before recovering and rising 0.6 per cent.

Another worry is that if AI succeeds in creating tools to do complicated tasks more cheaply, companies in industries as far flung as software, legal services and trucking logistics could see their businesses get undercut.

Investors have suddenly and aggressively sold stocks of companies seen as under threat in what analysts have likened to a “shoot first-ask questions later” mentality. Several profit reports from companies helped to lift stocks Wednesday.

They continued what’s been a strong reporting season for the big US companies in the S&P 500. Outside of earnings reports, Moderna jumped 6.1 per cent after saying regulators at the Food and Drug Administration will review its flu vaccine candidate after earlier refusing to consider it.

In the bond market, Treasury yields ticked higher following reports on the US economy that came in better than economists expected.