Asian stocks climb as sliding oil prices buoy sentiment

Asian stocks surged on November 10 as falling oil prices following US President Donald Trump's decision to halt military actions against Iran lifted market sentiment ahead of upcoming US inflation data. Brent crude futures had slid to their lowest levels since early September, trading below $100 per barrel, as investors bet on potential discussions between the US and Iran.

The conflict that began in February had raised global inflation concerns, prompting central banks to raise rates recently. Nick Twidale, a market strategist at ATFX Global, noted the developments suggested a possible end to the conflict, but cautioned that markets had moved too swiftly and any signs of faltering negotiations could see prices rebound rapidly.

The oil price decline helped allay inflation worries, contributing to a rise in stocks following last week's sharp decline due to Democrats' overwhelming victory in the US midterm elections. South Korea's KOSPI climbed over 5%, and Japan's Nikkei increased by about 3% in early trading. The MSCI's broad Asia-Pacific index of shares rose 1.5%, moving away from its seven-month low reached last week.

On November 9, the S&P 500 experienced its biggest one-day gain since April, closing up 2.35%, while the Nasdaq rose 2.7%, marking its best day in over four months. Anthony Saglimbene, chief market strategist at Ameriprise, believed the recent reset in expectations was beneficial, with the AI trade working through its own reset.

Earnings reports from tech companies, which will provide further insight into investor sentiment about AI, will be crucial for markets. Analysts are also watching the prospect of Anthropic's upcoming IPO, which could serve as an important indicator of investor confidence.

Market attention continues to focus on Nvidia, the world's second-most valuable company, after its board began investigating whether CEO Jensen Huang had been a target of a foreign intelligence operation. A media report claimed Huang had a close relationship with a Chinese businesswoman who passed information to Beijing. Huang has denied these allegations, stating he is unfaithful to his wife without providing further details.

Nvidia shares fell 4.2% following the news. Daniel Morgan, portfolio manager at Synovus Trust, acknowledged that certain individuals in the technology sector are closely linked to the success of their companies, but maintained confidence in Nvidia's continued leadership in the GPU AI chip market, even if Huang was relegated to a lesser role.

All eyes now turn to US inflation data, with economists predicting a moderate increase in prices for October and ongoing high inflation, potentially leading to a Federal Reserve rate hike next month. The two-year note yield, which typically follows Fed interest rate movements, rose 1.4 basis points to 4.56%. The US dollar remained stable in Asian trading hours.