Summary:

  • AI and chip stocks extended their slide across Asia, with the Kospi down about 4.8% after a sidecar halted program trading, and the Nikkei down about 1.5%
  • The broader Topix rose about 1.4%, while China’s Shanghai Composite jumped about 3.6% and Hong Kong’s Hang Seng about 3%
  • SoftBank fell almost 6%, hit by Arm’s slide, the AI selloff and an FT report that China has blocked its $5.4 billion ABB robotics deal
  • Oil stayed lower on hopes of US-Iran diplomacy, though the IRGC claimed fresh tanker incidents in the Strait of Hormuz
  • Gold extended Wednesday’s 3% jump to around $4,135
  • BoJ minutes showed the board backing further hikes; the Bank of England is expected to raise rates to 4% at 12:00 GMT

Equities

Asian markets split sharply on Thursday as the rotation out of AI and chip stocks that began on Wall Street overnight deepened, while most other sectors rallied on lower oil prices after Democrats won both chambers of Congress in the US midterm elections.

Korea bore the brunt. The Kospi slumped about 4.8% and the Kosdaq about 4.3%, with the selling heavy enough to trigger a sidecar, a five-minute pause in program trading tied to sharp moves in KOSPI 200 futures. The exchange also said trading will open an hour late on November 19 to keep roads clear for the national university entrance exam.

In Tokyo, the market divided along the same line. The broad Topix rose about 1.4%, led by real estate, retail and pharmaceuticals, while the tech-heavy Nikkei fell about 1.5% as chip equipment makers Advantest and Tokyo Electron slumped. Most Nikkei members rose, but losses in a handful of heavily weighted tech stocks dragged the index lower. Sony and Nintendo report after the close.

SoftBank Group fell about 5.8% to around ¥4,020. It was already down about 5% in the morning, weighed by a post-results slide in its chip designer Arm and the AI selloff, before the Financial Times reported during the lunch break that Chinese regulators had told the company they would not allow its $5.4 billion acquisition of ABB’s robotics division. China’s National Development and Reform Commission informed SoftBank of the decision, according to the report, and SoftBank is assessing whether it can seek approval again.

Chinese markets moved the other way. The Shanghai Composite jumped about 3.6% and Hong Kong’s Hang Seng about 3%.

US equity index futures were around 7,705 for the S&P 500 and 28,271 for the Nasdaq 100.

Oil and the Strait of Hormuz

Oil prices stayed lower, with Brent around $97 a barrel and WTI around $88, as the midterm result raised hopes of a diplomatic path with Iran. President Trump said the US had no immediate plans for military action, and Qatar stepped up mediation, though an Iranian official said the two sides remain far from agreement.

Late in the session, Iran’s Islamic Revolutionary Guard Corps claimed that two tankers and a tugboat had caught fire in the Strait of Hormuz, and separately said a tanker using what it called an unapproved route had struck a mine. The claims could not be independently verified. They follow a series of similar IRGC claims in recent weeks and are a reminder of the risk to the diplomacy-driven fall in oil.

In a separate report, Bloomberg said Abu Dhabi National Oil Co. was considering a third pipeline to bypass Hormuz that could be opened to other producers. ADNOC called the report inaccurate and purely speculative.

Gold

Gold extended its rally to around $4,135 an ounce, building on Wednesday’s jump of about 3%, its biggest daily gain since August. The move has come alongside lower oil, a weaker dollar and softer Treasury yields, rather than rising tensions. That fits a case set out by Citi, which argues that a sustained fall in oil could shift the Federal Reserve from hiking to cutting and revive gold’s rally, with targets of $4,500 over three months and $5,000 over six to 12 months. Fed futures still price a high chance of a December hike, however.

Central banks

Minutes of the Bank of Japan’s September meeting, when it raised rates to 1.25% in a 7-2 vote, showed members agreed to keep lifting rates. One said the pace may need to accelerate if prices overshoot, while members flagged a roughly 50% rise in crude since July as a key inflation risk. The government’s representative urged the bank to weigh the cumulative effect of past hikes. A private survey showed Japan’s services sector expanded slightly faster in October, though hiring slowed and cost pressures stayed sharp.

Swiss National Bank Chairman Martin Schlegel said October’s 1.5% inflation rate surprised the central bank and that it would not hesitate to adjust policy if needed, adding to expectations of a December hike.

The Bank of England is widely expected to raise Bank Rate by 25 basis points to 4% at 12:00 GMT (07:00 ET), its first hike of this cycle, with guidance on further moves and new inflation forecasts in focus.

Currencies

USD/JPY was around 157.80, AUD/USD around 0.7013 and EUR/USD around 1.1263. Australia’s goods trade surplus widened to about A$2.8 billion in September, a seven-month high, on stronger LNG and metals exports and a sharp drop in gold imports.

Also in focus

AstraZeneca has made an offer of around $10 billion for obesity drugmaker Rhythm Pharmaceuticals, The Wall Street Journal reported, sending Rhythm shares up 28%.

Goldman Sachs estimates that states likely to tighten rules on data centres hold about 45% of planned US capacity, though it expects any pauses to be short-lived. UBS raised its AI capital spending forecasts, while Citrini Research said growth in AI infrastructure investment has peaked.

In US earnings, Qualcomm beat forecasts but slipped on softer profit guidance, while Snap beat on profit but missed on users.

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Source: ForexLive / investingLive — original article