Asian Shares Rise After Two-Day Loss, Dollar Dips: Markets Wrap

(Bloomberg) -- Asian equities rebounded from their steepest two-day decline since April, as dip buyers returned after a brief pullback in technology shares, driven by concerns about lofty valuations.

MSCI’s regional gauge rose 1.3%, with Hong Kong and Japan among the biggest gainers. All 11 industry groups in the index advanced, with more than two stocks gaining for every one that fell. Softbank Group Corp. shares rose 0.5% as it explored a potential takeover of US chipmaker Marvell Technology Inc.

Asian gains came after Wall Street indexes bounced back from Tuesday’s selloff as traders bought the dip on some of the biggest winners of the AI boom. Futures on the S&P 500 and Nasdaq 100 indexes were relatively flat. Qualcomm Inc. shares fell 2.6% in late trading, becoming the latest chipmaker to deliver an upbeat forecast and still leave investors underwhelmed.

“For investors with cash on the sidelines, the recent market pullback seems like a good time to buy, especially for investors with a longer time horizon,” said Robert Edwards at Edwards Asset Management. “Earnings are crushing it and growing faster than revenues, and that often leads to multiple expansion.”

After a brief pullback that stirred concerns about stretched valuations, buyers returned as strong earnings momentum and upbeat private economic data lifted stocks. The shift in sentiment came after the global equity rally hit a speed bump earlier this week, when Wall Street executives cautioned that lofty valuations could trigger a correction.

Concerns about a narrowing cohort of stocks driving equity gains have become louder, while a pivot in the Federal Reserve’s commentary dented optimism about interest-rate cuts.

Meanwhile, President Donald Trump’s use of broad powers to impose his signature tariffs faced questions at the Supreme Court, which appeared skeptical of the sweeping global levies. Trump announced the century-high levies in April as part of his economic policy to reshape global trade.

In a nearly three-hour hearing Wednesday, the court hinted it was ready to put significant limits on Trump’s far-reaching agenda for the first time since he took office in January.

“It will certainly have a place in the back of the mind for investors,” said Nick Twidale, chief market analyst at AT Global Markets in Sydney. “Until it transfers to any action, I don’t think we will see much of a reaction from markets.”

While the importance of this case and the likelihood of a close split on the court argue for lengthy deliberation, the expedited consideration of the case and likely desire to avoid even larger eventual refunds imply that the court is likely to rule in December or January, Goldman Sachs Group Inc. economists including Alec Phillips wrote in a note.

In other corners of the market, gold held its gains, while oil edged up after three days of losses. The dollar fell slightly against all Group-of-10 peers, and Treasuries rose. The Bloomberg Dollar Spot Index edged 0.1% lower after snapping a five-day rally on Wednesday.

The dollar fell most against the yen, which rose after wage data showed faster growth in Japan’s labor cash earnings, supporting the case for the Bank of Japan to normalize its policy.

Meanwhile, the number of Chinese companies in MSCI Inc.’s global stock gauges has climbed for the first time in nearly two years, setting up the market for more inflows from passive investors.

More Chinese stocks were added to MSCI’s Global Standard Indexes than deleted in the quarterly shuffle for the first time since February 2024, according to data compiled by Bloomberg. The index provider added 26 Chinese companies and removed 20.

Corporate Highlights:

• Arm Holdings Plc, which provides the most widely used technology in computing processors, gave a bullish revenue forecast, helped by increasing interest in designing chips to run AI data centers.
• United Overseas Bank Ltd. shares slumped after the lender set aside its biggest provision of S$615 million ($470 million) citing commercial real estate risks in the US and Greater China.
• James Hardie Industries Plc shares tumbled after rivals sounded fresh warnings on the US home-improvement market, worsening what’s been a disastrous year for the company’s management and investors.
• The US will cut flight capacity by 10% at 40 high-volume markets across the country to alleviate pressure on air traffic controllers and the aviation system during what is now the longest government shutdown in history. International routes will be spared.
• Nissan Motor Co. has agreed to sell its global headquarters in Yokohama for ¥97 billion ($630 million) to a group sponsored by Hong Kong-listed autoparts maker Minth Group.
• Pony AI Inc. and WeRide Inc. fell on their trading debuts in Hong Kong after the pair of Chinese robotaxi firms battled for investors during their public offerings, which raised more than $1.1 billion.

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 12:59 p.m. Tokyo time
• Japan’s Topix rose 1.5%
• Australia’s S&P/ASX 200 rose 0.3%
• Hong Kong’s Hang Seng rose 1.6%
• The Shanghai Composite rose 0.9%
• Euro Stoxx 50 futures were little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.1% to $1.1507
• The Japanese yen rose 0.2% to 153.88 per dollar
• The offshore yuan was little changed at 7.1272 per dollar

Cryptocurrencies

• Bitcoin was little changed at $103,638.01
• Ether fell 0.2% to $3,434.82

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.14%
• Japan’s 10-year yield advanced one basis point to 1.670%
• Australia’s 10-year yield advanced five basis points to 4.37%

Commodities

• West Texas Intermediate crude rose 0.3% to $59.80 a barrel
• Spot gold rose 0.2% to $3,987.71 an ounce

This story was produced with the assistance of Bloomberg Automation.

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