Asian markets rise on technology support, Trump discusses investment with Lee and comments on Iran

The presidential office in Seoul announced on Wednesday that South Korean President Lee Jae-myung and US President Donald Trump welcomed “significant progress” in discussions related to strategic investment projects, during a 30-minute meeting on the sidelines of the United Nations General Assembly meetings.

The meeting came after the South Korean Ministry of Industry briefed lawmakers on Tuesday on plans to implement the joint investment package between the two countries, worth $350 billion, which includes a gas power project in Texas, identified as a first potential investment, along with potential investments in nuclear energy and a liquefied natural gas project in Alaska, according to Reuters.

“The two leaders welcomed the significant progress made in discussions on strategic investment projects between the two countries,” National Security Advisor Wei Sung-Lak said during a press briefing.

Wei added that the two leaders also agreed, based on the joint fact sheet issued following their summit last November, to deepen cooperation and continue discussions on issues including nuclear fuel enrichment and reprocessing, nuclear-powered submarines, shipbuilding, and the transfer of wartime operational control (OPCON) from the United States to South Korea.

Wei pointed out that Trump reiterated his readiness to engage in dialogue with North Korea, while the two leaders agreed to remain in close contact, in an effort to advance the peace process.

Wei also said that President Lee indicated that the US-China summit scheduled for Thursday will be important for regional developments, including relations between South Korea and China.

On Friday, US Secretary of State Marco Rubio called for the rapid implementation of South Korean investment commitments, during a meeting with South Korean Foreign Minister Cho Hyun, according to the US State Department.

In a post on the “X” platform (formerly Twitter), Lee said that he had an extensive discussion with Trump about the progress made in investment projects, and that they reaffirmed their commitment to continuing to strengthen the alliance between the two countries.

The Indian rupee fell slightly on Wednesday, tracking the decline of Asian currencies, with the dollar index rising to its highest level since late July, supported by growing expectations of the US Federal Reserve raising interest rates in the near term.

The rupee fell 0.1 percent to 95.6950 rupees to the dollar, compared to the close of the previous session at 95.59 rupees, according to Reuters.

Asian currencies fell by rates ranging between 0.1 and 0.3 percent, while investors are closely monitoring oil prices and the size of bets on raising US interest rates. Interest rate futures markets are pricing in about 75 basis points of interest rate increases over the next 12 months.

A recent series of interest rate increases and tightening guidance by major central banks are at the forefront of currency markets, at a time when the conflict with Iran is pushing oil prices higher and raising concerns about inflation.

Brent crude fell by about 1 percent today to $98.4 per barrel, amid hopes that diplomacy during the United Nations General Assembly meetings will open the way to a settlement of the war in the Middle East.

US President Donald Trump said on Tuesday that he might “eliminate” Iran if an agreement is not reached, but at the same time he indicated the possibility of reaching an agreement soon.

Weak capital inflows and pressures from rising energy bills added pressure on the rupee, but repeated central bank interventions partly contributed to limiting the currency's losses.

Traders believe that this approach is likely to continue in the near term, especially after the large inflows of foreign currencies attracted by the central bank through one-time exceptional measures helped raise India's foreign exchange reserves to a record level.

Amit Babari, managing director of CR Forex, a currency market consultancy, said: “If the dollar/rupee maintains trading below the 95.70 level, the possibilities of moving towards 95-95.20 will increase, while the 96 level remains a strong ceiling with the support of the Indian Central Bank’s interventions.”

Asian stocks headed towards recording gains for the sixth consecutive session on Wednesday, driven by continued consumer demand for artificial intelligence applications, which supported technology company stocks, while oil prices continued to decline, amid reports of a possible increase in supplies from the Middle East.

In the United States, President Donald Trump said that talks with Iran in New York had made progress, before he later threatened to eliminate the country if an agreement was not reached, according to Reuters.

Iranian President Masoud Pezeshkian is scheduled to deliver a speech before the United Nations General Assembly later, Wednesday, while markets await reports of the possibility of holding talks between him and Trump.

Brent crude futures fell 0.9 percent to $98.37 per barrel, while US West Texas Intermediate crude fell 1.3 percent to $89.32 per barrel.

Chinese President Xi Jinping will arrive in Washington later today, amid speculation about the possibility of extending the trade truce between the two countries, in addition to the possibility of cooperation in the field of artificial intelligence.

Renewed interest in artificial intelligence helped South Korean stocks rise 0.5 percent, with Samsung shares rising more than 2 percent, while Taiwanese stocks rose 0.7 percent, approaching record levels.

The broader MSCI index of Asia-Pacific stocks excluding Japan rose 0.3 percent, recording gains for the sixth consecutive session, while Chinese blue-chip stocks fell 0.5 percent.

Japanese markets were closed due to a public holiday, but Nikkei futures contracts recorded 66,735 points, an increase of approximately 1,700 points from the closing level of the cash index on Friday.

Chris Weston, head of research at brokerage firm Pepperstone, said that the markets expect “a strong opening in Japan tomorrow, with an additional decline in oil prices, stabilization of interest rate and Treasury markets, while the Nasdaq spot and futures markets record new record levels.”

He added, "Memory stocks led the market, supported by another strong session for the semiconductor sector, which recorded gains for the sixth day in a row."

Consumers are aggressively moving towards artificial intelligence agents

The data equipment sector received a boost from strong consumer demand for Meta's artificial intelligence agent, Muse, which topped the app download charts in the United States over the past two weeks.

Analysts are now looking to evaluate the performance of a similar product from Google Labs called “CC,” and the extent of its ability to attract consumers.

Attention was also drawn to the levels of demand for the SoftBank debt deal, which exceeds $10 billion, which reportedly attracted interest requests exceeding $20 billion, which could make it one of the largest high-risk bond deals ever.

On Wall Street, futures contracts for the Standard & Poor's 500 and Nasdaq indexes rose slightly.

In Europe, futures contracts for the Euro Stoxx 50, DAX and Financial Times indices rose by about 0.4 percent each.

The decline in oil prices contributed to pushing US Treasury bond futures slightly higher, with the 10-year bond yield remaining below 5 percent.

On the other hand, the two-year bond yield rose again to its highest level since mid-2024 at 4.7879 percent, with investors pricing in the possibility of additional tightening of monetary policy by the Federal Reserve.

Richmond Federal Reserve Chairman Tom Barkin and Boston Federal Reserve President Susan Collins on Tuesday expressed their support for raising interest rates last week, in light of continuing concerns about inflation.

Futures markets indicate a 54 percent probability that the Federal Reserve will raise interest rates again next October, while markets are currently pricing in an additional tightening of 33 basis points by the end of the year.

Expectations of higher interest rates helped push the dollar to its highest levels in several weeks against the euro, the British pound, and the Canadian dollar, which strengthened its position from a technical standpoint. The euro settled at around $1.1430, near its lowest level in two months.

Analysts pointed out that Trump's call to ban US diesel exports may constitute negative news for inflation in Europe. Due to the region's dependence, to a large extent, on fuel shipments coming from the United States.

Europe is already facing a shortage in natural gas supplies, which may push energy prices higher during the winter.

The dollar rose slightly against the yen to 157.60 yen, while speculators are wary of the possibility of Japanese authorities intervening again if the US currency exceeds the level of 160 yen.

In commodity markets, gold fell 0.3 percent to $4,341 per ounce, while copper approached record levels, after rising by about 18 percent since the beginning of the year.