MARKETS: Asia on the rise – Experts see stock rally extending beyond AI companies

On Friday, Asian markets traded in strong signs. Japan’s Topix index led the rise and hit an all-time high, led by financial companies. The Bank of Japan will hold its interest rate meeting next week, and a rate hike is considered almost certain.

In mainland China, stocks underperformed after the authorities signaled that economic support will be continued, but the stimulus will not be increased next year. The CSI 300, which describes the performance of the most traded shares in Shanghai and Shenzhen, was up 0.6 percent. In Hong Kong, the Hang Seng had strengthened by 1.8 percent.

According to the assessment of the news agency Bloomberg, a clear expansion of the stock rally can be observed in the market. Technology stocks underperformed in both Asia and the US, suggesting that investors are now diversifying their funds away from large tech companies. This broad-based rally has lifted the MSCI All Country World index by nearly 21 percent this year, and the year is shaping up to be the best since 2019.

of Bolvin Wealth Management Group manager Gina Bolvin is confident about the future. According to him, with the interest rate cuts underway and the results heading upwards, the bull market seems to continue until 2026.

“The momentum should continue until the end of the year. As the adoption of artificial intelligence expands, market shares are also expected to grow beyond the Magnificent Seven companies,” Bolvin tells Bloomberg.

However, not everyone shares unreserved optimism. Legal & General Investment Managementin Head of Investment Strategy, Asia Ben Bennett said that he had slightly reduced the share weight towards the end of the year. He is worried about a possible “artificial intelligence fluctuation” and the uncertainty surrounding the actions of the Fed.

The dollar weakened on the foreign exchange market. Bloomberg’s dollar index traded near two-month lows and was on its way to a third straight week of losses.

Futures predict an upswing in Europe and the United States. The Euro Stoxx 50 is expected to open 0.5 percent higher, while in the US the S&P 500 would open a meager 0.01 percent gain.