Berliner Boersenzeitung - Tech-fuelled rally fizzles as oil prices rise

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Tech-fuelled rally fizzles as oil prices rise
Tech-fuelled rally fizzles as oil prices rise / Photo: Brandon Bell - GETTY IMAGES NORTH AMERICA/AFP/File

Tech-fuelled rally fizzles as oil prices rise

Asian stock markets rallied Friday, led by a record surge of almost 18 percent for Seoul as technology firms performed a blistering recovery from an extended sell-off.

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But a rise in oil prices and some profit taking saw the rally fizzle as trading shifted to Europe and North America.

"End of month profit taking might be a bit of a cliché, but with a weekend of potential strikes on Iran and the last day of July trading upon us investors have looked to book in some gains," said Chris Beauchamp, chief market analyst at online trading and investing platform IG.

Benchmark international oil contract Brent crude was up 1.8 percent and the main US contract, WTI, climbed 2.6 percent.

Asian were led higher by a tech rebound following four weeks of blood-letting fuelled by worries over the vast sums being invested in artificial intelligence.

Seoul's Kospi had been at the forefront of the sell-off after hitting a record high a month ago, with chipmakers SK hynix and Samsung the poster children of the rout, losing around half their value in the panic.

However, the voracious buying sentiment that had characterised markets for much of the past two years was reignited Friday.

US giant Microsoft unveiled healthy earnings this week that saw their shares storm higher on Wall Street.

"The rebound in tech powered by Microsoft's extremely well-received numbers has helped lift the broader market mood, helping investors to put concerns about the Iran conflict and its continuing impact on ice for now," noted AJ Bell investment director Russ Mould.

Analysts have noted that heavy selling in recent weeks was focused on concerns about when the huge sums invested in artificial intelligence would see returns, rather than fundamental problems in the sector.

Seoul's eye-watering rally was helped by news that South Korea's government planned to pump almost $14 billion into its sovereign wealth fund for AI investments and data centres.

South Korean chipmaker SK hynix surged 30 percent -- wiping out its losses from the previous two days.

Meanwhile in the United States, shares in Amazon surged over 13 percent higher after it beat analysts' expectations when it reported growth in overall revenue and sales, particularly in its cloud, artificial intelligence and chips divisions.

The company said that two of its AI-related divisions grew by "triple-digit percentages" -- its AI cloud and chips businesses each "exceeded" $25 billion annual revenue run rates, a measure of recurring sales.

But shares in Apple fell 9.3 percent despite beating market expectations with sales rising 16 percent to $109.4 billion in the April-through-June period, while profit climbed 27 percent to $29.8 billion.

Souring the picture for investors, Apple forecast revenue growth of between nine and 11 percent in the current quarter, which was below estimates. It cited supply constraints.

Elsewhere Friday, the yen held gains against the dollar, a day after rallying amid speculation that Japanese authorities intervened to prop up the currency, which had been sitting around 40-year lows.

London's benchmark FTSE 100 index, whose major constituents do not feature technology companies, hit another record high as it came close to reaching 11,000 points for the first time.

However it later pulled back and ended the day lower.

- Key figures around 1530 GMT -

New York - DOW: UP less than 0.1 percent at 52,233.32 points

New York - S&P 500: DOWN 0.2 percent at 7,424.54

New York - Nasdaq Composite: DOWN 0.2 percent at 25,073.11

London - FTSE 100: DOWN 0.3 percent at 10,868.05 (close)

Paris - CAC 40: UP 0.3 percent at 8,509.64 (close)

Frankfurt - DAX: UP less than 0.1 percent at 25,629.24 (close)

Seoul - Kospi: UP 17.9 percent at 6,595.45 (close)

Tokyo - Nikkei 225: UP 4.0 percent at 64,362.02 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 25,884.43 (close)

Shanghai - Composite: UP 0.7 percent at 3,832.26 (close)

Dollar/yen: DOWN at 159.40 yen from 162.61 yen on Thursday

Euro/dollar: DOWN at $1.1506 from $1.1529

Pound/dollar: DOWN at $1.3461 from $1.3468

Euro/pound: DOWN at 85.48 pence at 85.60 pence

Brent North Sea Crude: UP 2.0 percent at $88.60 per barrel

West Texas Intermediate: UP 2.4 percent at $85.59 per barrel

(Y.Berger--BBZ)