Asian stock markets experienced a surge, fueled by hopes that diplomatic efforts may ease the tensions between the U.S. and Iran. Notably, South Korea’s KOSPI and KOSDAQ indices closed with gains exceeding 4%, while oil prices took a downturn.
Trump’s Remarks Elevate Risk Appetite
According to a report from The Wall Street Journal dated November 10, U.S. President Donald Trump’s statements regarding Iran have bolstered expectations for a diplomatic resolution. This renewed optimism follows last week’s stock sell-offs and controversies surrounding Nvidia, reigniting investors’ risk appetite in Asian markets. Ryan Wells, an analyst at Westpac, noted that initial signs of diplomatic progress between the two nations have supported market sentiments.
Falling crude oil prices led to a buying spree in aviation stocks across Asia, while shares in energy companies lost ground.
Robust Gains in South Korean and Hong Kong Markets
In South Korea, the KOSPI and KOSDAQ indices rebounded after four consecutive trading days of decline. The Hong Kong stock exchange, buoyed by data from Bitget, began the day on an upswing, further expanding its gains. Shares of Zhipu increased by 12.26%, and MiniMax saw a 10.88% rise.
SoftBank Reports First Net Loss in Nearly Two Years
According to sources from Jinshi, Japanese investment giant SoftBank posted a net loss of 1.12 trillion yen ($7.1 billion) in the second quarter of its fiscal year, marking its first net loss in nearly two years, compared to a profit in the same period last year.
Concerns surrounding expenditures and demand in the AI sector have pressured SoftBank’s key investments. Declines in shares of chipmakers Arm and Intel, along with Korean e-commerce company Coupang, weakened the group’s financial results. The Vision Fund division, which has stakes in hundreds of tech startups, reported a loss of 81.6 billion yen.
SoftBank’s shares, viewed as indicators of investor sentiment toward OpenAI and the broader AI sector, have plummeted by over 50% since reaching record highs in June. The decline has been influenced by worries over the company’s strategy to fund substantial AI investments through borrowing. Additionally, concerns loomed that a decisive victory for Democrats in the U.S. midterm elections could disrupt numerous projects led by Masayoshi Son, exerting further pressure on the company’s stock.
While diplomatic optimism boosted buying activities in Asian markets, the pressure on SoftBank stemmed from its investment strategies. Losses in its portfolio were reflected in its quarterly outcomes, and the financing of new AI ventures through debt added to the downward pressure on its stock price.
