AI outlook, energy prices to drive Asian markets as Fed holds rate steady
There may also be further monetary tightening for countries where currencies are under pressure
Artificial intelligence and high energy prices are expected to continue driving Asian markets, despite the US Federal Reserve keeping interest rates steady, according to analysts. Two US AI hyperscalers, Microsoft and Alphabet, reported mixed results, leaving the market with contrasting sentiments. Michael Langham, an emerging markets economist at Aberdeen Investments, noted that higher oil prices will put pressure on importer currencies and the US dollar funding conditions may tighten further, even if US growth remains strong.
Countries with currency pressures, such as the Philippines, India, and Indonesia, may face further monetary tightening. Asian equities were mixed, with fintech stocks falling after Samsung's earnings missed estimates. The Singapore Straits Times Index (STI) rose slightly, but was pulled down by weak real estate investment trusts (REITs).
DBS Group Research analyst Yeo Kee Yan sees potential in rate-sensitive sectors, such as Singapore REITs, developers with value unlock potential, and gold-related stocks. The Fed's pause and the mixed results from US AI companies suggest that investors should not remain idle, as regional central banks confront different growth, inflation, currency, and external pressures.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
