Asian Stocks Climb as AI Optimism and Fed Dovishness Lift Sentiment

Asian equities advanced on Thursday, with technology shares leading gains as investor enthusiasm for artificial intelligence continued to drive momentum in chipmaking and software sectors.

The upbeat tone followed record closes on Wall Street, where the S&P 500 and NASDAQ Composite surged on renewed optimism around AI demand and expectations of further U.S. rate cuts.

Mainland China Rebounds Strongly After Holiday

China’s Shanghai Composite and CSI 300 indices gained 1.3% and 1.6%, respectively, as investors returned from the Golden Week holiday.

State media reported robust travel and spending trends during the break, with passenger travel up 6.2% year-on-year and retail sales rising 3.3% in the first four days. These signs of solid consumer activity helped fuel optimism about a recovery in domestic demand despite lingering deflationary pressures.

Tech and industrial shares led the rally, with Chinese chipmakers catching up to global peers that rallied last week amid AI-driven optimism.

Japan Near Record Highs on Tech and Policy Support

Japan’s Nikkei 225 jumped 1.5%, while the TOPIX added 0.4%, positioning both benchmarks near all-time highs.

SoftBank Group Corp. soared over 11% after announcing plans to acquire ABB’s robotics division for $5.4 billion, reinforcing its aggressive bet on AI and automation.

Industrial stocks such as Yaskawa Electric, Ebara, and Fuji Electric also advanced sharply, buoyed by expectations of increased government spending under incoming Prime Minister Sanae Takaichi, a known fiscal dove.

Market sentiment was further boosted by speculation that the Bank of Japan will delay any further rate hikes, supporting liquidity condition

Hong Kong Lags as Healthcare Stocks Drop

The Hang Seng Index recovered from early losses to trade 0.3% higher, but gains were capped by steep declines in health technology names.

Alibaba Health and JD Health fell 3.6% and 4.7%, respectively, following a report that Microsoft plans to expand into AI-powered healthcare, raising competitive concerns. Sino Biopharmaceutical and Hansoh Pharmaceutical slumped 8.1% and 6.8%, respectively.

Meanwhile, HSBC shares slid 6% after it proposed a HK$106 billion ($13.6 billion) privatization of Hang Seng Bank, which itself soared 40% to become the session’s top performer.

Broader Asia: Tech Strength Offsets Mixed Regional Moves

Elsewhere in Asia, sentiment was broadly positive but uneven across sectors.

• Taiwan’s Weighted Index climbed to a new record high amid strong chip demand.
• Australia’s ASX 200 gained 0.3%, lifted by mining and tech stocks.
• India’s Nifty 50 rose 0.2%, maintaining its footing above the 25,000 level.
• Singapore’s Straits Times Index slipped 0.3%, weighed by banks and property stocks.
• South Korean markets remained closed for a public holiday.

Outlook: AI Momentum and Fed Support in Focus

Investor optimism was reinforced by dovish Federal Reserve minutes from September, which boosted expectations of additional rate cuts this year.

Attention now turns to Fed Chair Jerome Powell’s speech later today, where markets will look for confirmation of the central bank’s easing trajectory.

A U.S.-brokered ceasefire between Hamas and Israel also supported broader risk appetite, helping temper geopolitical risk premiums and improving global equity sentiment.