Tech leads Asian stock rally as traders track Wall Street rebound

Asian stocks rallied on November 10, continuing the upward trend from Wall Street, driven by technology firms, especially those in the AI sector. This rally came after a price drop following last week's market sell-off and a further decline in oil prices, contributing to the positive sentiment. Companies such as Amazon, Microsoft, and Apple led the gains in New York, with tech stocks bouncing back from the recent slump.

The Nasdaq index increased by 2.7 percent, fueling the strong performance in Wall Street. In Asia, Seoul's Kospi index surged more than 4.1 percent, while Hong Kong's Hang Seng Index climbed 0.4 percent. Tokyo's Nikkei 225 index rose by 2.9 percent, and Taiwan Semiconductor Manufacturing Company (TSMC) saw a 1.1 percent increase, while MediaTek rose by over 7 percent, pushing the Taiex index up by 3.5 percent.

However, SPI Asset Management's Stephen Innes cautioned that the rally did not indicate a return to robust market health. He observed that the market's rise was primarily due to investors stepping away, rather than a renewed confidence in the market. The hyperscalers, or leading tech companies, continued to play a central role in the AI investment cycle, but there was growing skepticism about the returns on the substantial capital expenditures being invested.

Equipment providers, optical networking firms, and some data center suppliers may still benefit from ongoing spending programs, even as investors become more selective about the long-term profitability of these projects. Oil prices kept falling as hopes grew for an eventual resolution to the ongoing Middle East crisis between the US and Iran.

The main contracts for West Texas Intermediate and Brent North Sea crude oil fell by around 1.1 percent and 1.0 percent, respectively, both down nearly 6 percent the day before. The recent price drops have resulted in a loss of around 20 percent for these commodities this month due to expectations of a solution to the seven-month-long conflict, which has raised inflation and prompted central banks to raise interest rates.

President Donald Trump claimed there was "positive momentum" towards ending the war after meeting with Qatar's prime minister at the White House, where they discussed the situation in Iran. Trump expressed optimism but also indicated that a resumption of strikes against Iran was unlikely, given that key allies in the Gulf region preferred maintaining the status quo.