Nikkei, Yen, Hang Seng: Asia's stock exchanges divided - AI concerns weigh on Japan, China in positive territory
Quick Look
- Asian stock markets started the week weakly on worries about heavy investment in artificial intelligence and interest rate concerns, while surprisingly strong economic growth from China limited losses.
- The Nikkei index in Tokyo fell 1.2 percent, while the Shanghai and CSI 300 indexes rose slightly.
AI-generated summary
Why It Matters
Investors are showing mixed reactions to heavy investments in artificial intelligence, while also awaiting interest rate signals and the upcoming balance sheets of major US technology companies.
Investors doubt whether the revenue from artificial intelligence justifies the investments. In addition, interest rate signals and the upcoming balance sheets of US technology companies are coming into focus.
Investors are wavering between inflation and growth concerns. Photo: dpa
Singapore/Beijing/Tokyo. Concerns about the immense costs of artificial intelligence (AI) weighed on Asian stock markets at the start of the week, while surprisingly strong economic data from China curbed losses. The Japanese stock market trended weaker on Monday.
In Tokyo, the Nikkei index, which includes 225 stocks, fell 1.2 percent to 64,534 points
The broader Topix was trading 0.4 percent lower at 4,050 points.
The Shanghai Stock Exchange, however, gained 0.3 percent to 3,728 points.
The CSI 300 index with the 300 most important Chinese companies on the mainland stock exchanges rose 0.4 percent to 4,186 points.
In Japan, weak guidance from Wall Street and concerns about interest rates depressed the prices of technology companies. Central bank chief Kazuo Ueda signaled that core inflation is close to the target of two percent and that strong demand for AI is increasing price pressure. “While chip-related stocks drag the index lower, buying in value and defensive stocks is likely to support the market,” said Tokai Tokyo analyst Yuta Okamoto.
The biggest losers included Taiyo Yuden, down 7.42 percent, and Sumitomo Electric and Sumco, which lost almost six percent. On the other hand, Toho with an increase of 3.64 percent, Baycurrent and Aeon were in demand.
In China, economic growth provided relief: gross domestic product rose 4.5 percent in the third quarter, exceeding expectations, reducing pressure on the government in Beijing to launch further aggressive economic stimulus packages.
Nevertheless, the mood remained subdued in view of the upcoming US balance sheets of tech giants. “Investors have long worried that AI revenues will not be enough to recoup the massive upfront investments,” said economist My Bui from asset manager AMP. Rising financing costs also made it more difficult to maintain the expansion of the AI infrastructure.
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What to Watch
AI outlook — possibilities, not facts
The upcoming balance sheets of US technology companies will have a short-term impact on the Asian stock markets.
Likely · Within days
Open Questions
- When will AI investments generate sufficient returns?
- How will the US central banks react to the inflation signals?
- What specific impact will the upcoming tech financial statements have on the markets?
