Fed’s Hawkish Stance Creates Uncertainty
Asian stocks remained flat on Thursday as investors grappled with the Federal Reserve’s hawkish tone, signaling limited room for easing amid stubborn U.S. inflation.
Australian Market Breaks Records
Australia’s ASX 200 index rose 0.8% to an all-time high of 8,515.70 points, driven by expectations of an interest rate cut by the RBA in February. This optimism followed weaker-than-expected Q4 inflation data, though core inflation staying above the target range leaves room for caution.
Tech Stocks Under Pressure from AI Developments
The tech sector continued its decline as concerns over AI investments grew. SoftBank shares dropped further after reports of a massive OpenAI investment, while China’s DeepSeek R1 AI model disrupted market confidence by demonstrating efficiency superior to current tech leaders.
Lunar New Year Holiday Limits Activity
Trading volumes across Asia were thin due to market closures in China, Hong Kong, Taiwan, South Korea, and Singapore for the Lunar New Year celebrations.
Wall Street Influence and Earnings Impact
Wall Street’s mixed performance, driven by Fed policies and earnings from Microsoft and Tesla, added to the cautious sentiment. Microsoft’s Azure unit underperformed, clouding optimism around AI investments.
