The China Mail - Stocks rally on AI optimism after Micron's blowout forecast

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Stocks rally on AI optimism after Micron's blowout forecast
Stocks rally on AI optimism after Micron's blowout forecast / Photo: © AFP/File

Stocks rally on AI optimism after Micron's blowout forecast

Stock markets rallied Thursday after bumper earnings from US chip titan Micron helped calm investor worries about promised payoffs from the massive AI investment boom.

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Gains were boosted by further declines for oil prices to below levels seen before the US-Iran war, as shipping picks up through the Strait of Hormuz.

Markets have endured a roller-coaster run this week amid concerns over when the eye-watering sums invested in artificial intelligence will reap returns.

Micron Technology helped turn around the mood by reporting fourth-quarter revenue forecasts of $50 billion, which blew past expectations.

The report reignited confidence in a sector that has been the key driver of a surge across equity markets this year.

South Korea's tech-heavy Kospi index rose for a second day, rebounding from a 10 percent plunge on Tuesday.

"Worries that revenues wouldn't keep up with soaring tech valuations have been put to bed, at least for now, by Micron's results," said Susannah Streeter, chief investment strategist at Wealth Club.

Tokyo's Nikkei rallied, piling on more than four percent as tech giants Advantest and Tokyo Electron powered higher.

Shanghai also rose, while Hong Kong struggled.

In Europe, the Micron reassurance and a decline in oil prices helped push London, Paris and Frankfurt stock markets higher in midday deals.

"More broadly, the oil price decline has eased fears about a stagflationary shock and aggressive rate hikes," said Deutsche Bank's Jim Reid, referring to high inflation mixed with elevated unemployment and sluggish economic growth.

Maritime tracking firms have reported dozens of ships passing through the strait, fuelling hopes that Gulf oil will be returning to global markets soon.

Brent North Sea crude, the international benchmark, sank to a low of $72.06 a barrel Thursday, below the $72.48 it closed at the day before the United States and Israel began bombing Iran on February 28.

Traders were meanwhile awaiting the latest reading of the Federal Reserve's preferred measure of US inflation, the personal consumption expenditures index, to be released later Thursday.

A hawkish pivot by the Fed's policy committee last week ramped up bets on a rate increase before the end of the year, boosting the dollar.

Inflation has risen across the globe after the Mideast war sent energy costs surging.

- Key figures around 1115 GMT -

London - FTSE 100: UP 0.5 percent at 10,510.92 points

Paris - CAC 40: UP 0.5 percent at 8,428.30

Frankfurt - DAX: UP 0.5 percent at 24,871.91

Seoul - Kospi: UP 5.4 percent at 8,930.30 (close)

Tokyo - Nikkei 225: UP 4.6 percent at 72,366.34 (close)

Hong Kong - Hang Seng Index: DOWN 1.4 percent at 23,076.91 (close)

Shanghai - Composite: UP 0.2 percent at 4,120.28 (close)

New York - Dow: UP 0.4 percent at 51,848.90 (close)

Brent North Sea Crude: DOWN 1.3 percent at $72.79 a barrel

West Texas Intermediate: DOWN 1.1 percent at $69.55 a barrel

Euro/dollar: DOWN at $1.1341 from $1.1357 on Wednesday

Pound/dollar: DOWN at $1.3159 from $1.3162

Dollar/yen: UP at 161.90 yen from 161.81 yen

Euro/pound: DOWN at 86.18 pence from 86.26 pence

E.Choi--ThChM