Asian Shares Gain, Samsung-OpenAI Deal Lifts Tech: Markets Wrap

Asian equities rallied, led by technology stocks, after OpenAI’s deal with South Korean chipmakers bolstered optimism over artificial intelligence.

The MSCI Asia Pacific Index rose almost 1%, trading above a record close reached last month, with chip-related technology stocks leading the charge. Samsung Electronics Co. advanced 4.5% and SK Hynix Inc. jumped 11% after signing an initial supply pact with OpenAI’s Stargate project. That helped South Korea’s Kospi benchmark hit a record intraday high. Hong Kong shares rose as traders returned after a holiday.

Treasuries held their gains, spurred by private payrolls data that reinforced bets the Federal Reserve will lower interest rates this month. The dollar eased against most Group-of-10 peers and gold steadied, following a five-day rally that saw it reach successive records.

The artificial intelligence boom and billions in corporate investment have been key drivers of the stock rally to record highs after April’s slump. Investors have also shrugged off the political impasse in Washington that has led to the first government shutdown in seven years and threatens to obstruct crucial economic data the Fed needs for its interest-rate decisions.

“Sam Altman’s OpenAI Stargate deal with the Korean companies further reinforces the strong structural backdrop of robust AI demand in the coming years,” said Vey-Sern Ling, senior equity adviser for Asia technology at Union Bancaire Privee. “Memory chip stocks like SK Hynix and Samsung are currently enjoying a cyclical upcycle for conventional memory.”

Meanwhile, an ADP Research report Wednesday showed payrolls at US companies had unexpectedly dropped in September, consistent with other data over the past month indicating a slowing labor market. That prompted traders to add to bets on two more Fed rate cuts this year. 

“The market is going to have to focus on independent private sources to get a sense of what’s going on,” said Wellington Management portfolio manager Brij Khurana. “If the administration does go forward with cutting headcount, there is potential for this to have an economic impact and probably more so than what we’re used to.”

The JOLTS report on Tuesday had signaled that demand for workers is slowing, giving traders a snapshot of the labor market at a time the Bureau of Labor Statistics’ nonfarm payrolls data will likely be delayed. 

Even if the September nonfarm payroll report cannot be published before the Fed meeting, officials will have enough information about the labor market to deliver another 25-basis-point “insurance” cut at the October meeting, said Atakan Bakiskan, US economist at Berenberg.

Investors analysing the impact of previous shutdowns have determined that such events don’t last long and often have a negligible macroeconomic impact.

“What sets this shutdown apart is the threat of permanent layoffs for non-essential federal staff, which, while possibly political bluster and subject to legal challenges, could prolong the drag on public sector payrolls,” Thomas Ryan, North America economist at Capital Economics, wrote in a note.

At a White House press conference on Wednesday, Vice President JD Vance said he doesn’t anticipate a long shutdown, adding that layoffs will come if it lasts for days or weeks. 

• BYD Co.’s monthly sales fell for the first time in more than 18 months even as the company’s domestic rivals reported strong gains amid fierce competition in the Chinese market.

• Samsung Electronics Co. and SK Hynix Inc. have forged initial agreements to supply chips and other gear to OpenAI’s Stargate project.

• Intel Corp. shares climbed after Semafor reported that the company is in talks to add Advanced Micro Devices Inc. as a customer for its manufacturing business.

• Macau casino stocks mostly fell after the gambling hub reported September gaming revenue that missed estimates.

Some of the main moves in markets: 

Stocks

• S&P 500 futures were little changed as of 12:08 p.m. Tokyo time

• Japan’s Topix fell 0.7%

• Australia’s S&P/ASX 200 rose 1%

• Hong Kong’s Hang Seng rose 1.3%

• Euro Stoxx 50 futures rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1736

• The Japanese yen was little changed at 147.19 per dollar

• The offshore yuan was little changed at 7.1298 per dollar

Cryptocurrencies

• Bitcoin rose 1.1% to $118,882.61

• Ether rose 1.2% to $4,388.27

Bonds

• The yield on 10-year Treasuries was little changed at 4.10%

• Japan’s 10-year yield declined 1.5 basis points to 1.635%

• Australia’s 10-year yield declined four basis points to 4.33%

Commodities

• West Texas Intermediate crude rose 0.5% to $62.10 a barrel

• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.