Asian stocks gain as South Korean tech shares advance
The MSCI Asia Pacific equities gauge climbs 0.2% as South Korean shares rise 1.3%
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ASIAN stocks gained on Friday (Aug 7) as traders looked past geopolitical tensions and technology stocks advanced in South Korea. Oil rose as prospects for a lasting Middle East agreement remained uncertain.
The MSCI Asia Pacific equities gauge climbed 0.2 per cent with South Korean shares rising 1.3 per cent.
Earlier, Wall Street gauges dropped for a second consecutive day. US futures contracts for the tech-heavy Nasdaq 100 Index climbed 0.3 per cent in early Asian trading.
Brent rose over 1 per cent to US$83.45 a barrel as escalating tensions in the Middle East and a lack of clarity on a deal to reopen the crucial waterway lifted the commodity.
Higher energy prices revived concerns that the US Federal Reserve may need to keep interest rates elevated, sending the 10-year Treasury yield up seven basis points to 4.68 per cent in the US session.
Treasury futures inched lower in early Asian trading.
The US dollar held steady after posting its biggest gain in two weeks.
A lack of a deal in the Middle East risks keeping energy prices higher, adding to a market already volatile on the artificial intelligence trade.
Attention now turns to Friday’s US employment report for fresh clues on the Fed’s policy path. A stronger-than-expected payrolls reading would reinforce the case for higher-for-longer interest rates.
“Near-term risks remain, especially if US data stay firm, oil prices keep inflation concerns alive, or markets continue to price in a more hawkish Fed rate path,” said Ulrike Hoffmann-Burchardi at UBS chief investment office.
Iran will seek to restrict US and Israeli ships from the Strait of Hormuz and require compensation from countries it considers hostile before allowing passage, according to local media reports on a proposed Iran-Oman agreement to manage the strategic waterway.
The reports come as officials in both Washington and Teheran have signalled that an accord may be close.
US President Donald Trump, who recently stepped back from threats to resume military strikes on Iran, said on Thursday that negotiations were “going fine” and that he was involved, but declined to say whether a deal had been reached.
Separately, Fars news agency said Iranian naval forces had struck “hostile targets” at the entrance to the strait.
“Wall Street is reversing again from sharp recent gains, as a lack of clarity over the Strait of Hormuz has investors questioning whether the strong rally at the start of the week was justified by perceived improvements in geopolitical negotiations,” said José Torres, senior economist at Interactive Brokers.
US economic data released on Thursday highlighted the resilience of the US labour market, leaving inflation as the key variable for the Fed’s September meeting. Initial jobless claims remained below 200,000 for a third consecutive week, while a separate report showed labour productivity accelerated by more than expected in the second quarter as companies worked to offset higher costs.
Traders now turn their attention to Friday’s payrolls report. Economists surveyed by Bloomberg expect employers added 80,000 jobs in July, following a weaker-than-expected gain of 57,000 in June.
The report is expected to provide the clearest signal yet on whether the labour market is cooling enough to support expectations for Fed easing later in 2026.
“Friday’s jobs report is of greater importance for markets given how fast this stock market has rallied over the past week, and ultimately we will need to see a number that is not too hot and not too cold in order for the market to keep grinding higher,” said Clark Bellin at Bellwether Wealth.
Among the main moves across markets, S&P 500 futures were little changed as of 9.11 am Tokyo time. Hang Seng futures were little changed, Japan’s Topix was little changed and Australia’s S&P/ASX 200 fell 0.3 per cent. BLOOMBERG
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