Precise Investors Editorial Team
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2%
Asian stocks were on shaky ground on Wednesday on fears that advancements in artificial intelligence could supplant traditional software.
Oil prices jumped, while precious metals found a firmer footing after a recent rout.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2%, while Nikkei dropped 1.23%.
The AI trade is splitting between relative winners and losers, said Ben Bennett, head of investment strategy for Asia at L&G Asset Management.
He added: We saw that last week after Microsoft fell despite decent results on fears of disruption to its software business. And that software wobble has continued this week. So, it’s not simply that the tech sector is a universal winner – it’s going to have some weak areas too.
KOSPI dropped 0.14%, while stocks in Taiwan slipped 0.68%.
Precious metals were meanwhile recovering from a rout. Spot gold reclaimed the $5,000 level and was up 1.5% at $5,014.31 an ounce, while silver added 1.7% to $86.57 an ounce.
The meltdown came after U.S. President Donald Trump announced Kevin Warsh as his pick to lead the central bank, while a margin hike by CME exacerbated the selling. Warsh is expected to shrink the central bank’s balance sheet, which usually hurts non-yielding precious metals.
We expect elevated volatility to continue in the near term, but stabilization should return once the market finds its footing, said Joshua Chim, general manager of online broker FSMone.
He added that retail investors on the platform had been buying the dip via unit trusts or ETFs, following the significant correction in gold and silver prices.
Nasdaq futures slid 0.25% after losing more than 1% in the cash session overnight, while S&P 500 futures were down 0.1%. EUROSTOXX 50 futures slipped 0.07%.
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