Investing.com-- Most Asian stocks rose on Wednesday, with technology shares in the lead after OpenAI announced a massive partnership to build more artificial intelligence infrastructure in the U.S.
But Chinese markets lagged, falling sharply after U.S. President Donald Trump raised the prospect of increased trade tariffs on the country by as soon as February.
Focus this week is also on a Bank of Japan meeting, where the central bank is expected to raise interest rates amid improving economic growth and rising inflation.
Asian markets took positive cues from Wall Street, which closed higher on strength in tech stocks. U.S. stock index futures rose in Asian trade, with blowout earnings from Netflix Inc (NASDAQ:NFLX) adding to the positive sentiment. Netflix surged over 10% in aftermarket trade.
Asian tech surges as OpenAI announces $500 bln partnership
Tech-heavy Asian bourses were the best performers in Asia on Wednesday, with Japan’s Nikkei 225 index adding 1.5%, while South Korea’s KOSPI rose 0.6%.
Chipmaking stocks including Advantest Corp. (TYO:6857), Tokyo Electron Ltd. (TYO:8035), and SK Hynix Inc (KS:000660) rose between 2.2% and 4%. Japan’s SoftBank Group Corp. (TYO:9984), which is a key partner in the new OpenAI venture, rallied over 7%, while TSMC (TW:2330)- the world’s biggest contract chipmaker- rose over 2% in Taiwan trade.
Sentiment towards tech was boosted chiefly by OpenAI announcing a $500 billion venture to build critical AI infrastructure in the U.S.
The venture- called “Stargate,” will involve several major tech companies, including Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), and Oracle Corporation (NYSE:ORCL), and is likely to boost demand for AI chips and data center infrastructure.
Several Asian firms make up a key part of this supply chain. Optimism over AI also boosted broader tech stocks in Asia.
Other Asian markets were mostly upbeat, tracking overnight strength in Wall Street. Australia’s ASX 200 index added 0.4%, while South Korea’s KOSPI rose 0.1%.
Futures for India’s Nifty 50 index pointed to a mildly positive open, after the index slumped over 1% on Tuesday.
Chinese shares sink as Trump flags 10% tariffs
China’s Shanghai Shenzhen CSI 300 fell 0.9%, while the Shanghai Composite shed 0.8%. Hong Kong’s Hang Seng index fell 1.3%.
Trump said he could impose a 10% tariff on Chinese imports by as soon as February 1, citing concerns over the flow of illicit drugs, specifically fentanyl, from China into Mexico and Canada, and into the U.S.
Trump also threatened a 25% tariff on Canada and Mexico,
While markets had initially seen some relief from Trump not imposing any tariffs on day one of his presidency, his comments on Tuesday kept fears of a trade war squarely in play.
Still, Trump’s 10% tariff threat against China is far lower than the 60% he had threatened during his campaigning. China is also expected to release more stimulus measures in the face of U.S. trade headwinds.