Asian equities rose as expectations grew that tensions between the United States and Iran may ease through diplomatic channels, prompting investors to increase risk-taking. Major indices in South Korea, including KOSPI and KOSDAQ, closed the day with gains exceeding 4%.
Trump’s statements spur optimism
US President Donald Trump’s recent remarks regarding Iran boosted hopes for a diplomatic resolution. Following last week’s equity sell-offs and uncertainty surrounding Nvidia, this prospect of progress contributed to renewed risk appetite in Asian financial markets. Westpac analyst Ryan Wells indicated that the first signs of diplomatic movement between the two countries supported market sentiment.
Declining crude oil prices prompted buying in airline stocks across Asia, while shares of energy companies fell.
Robust gains in South Korea and Hong Kong
After four consecutive sessions of declines, South Korean benchmarks KOSPI and KOSDAQ posted a strong rebound. Meanwhile, Hong Kong stocks also advanced at the open, according to Bitget data, and extended gains throughout the session. Notable performances included Zhipu, whose shares climbed 12.26%, and MiniMax, which rose 10.88%.
SoftBank posts first net loss in nearly two years
Japanese investment conglomerate SoftBank reported a net loss of 1.12 trillion yen, or $7.1 billion, for its fiscal second quarter, as conveyed by Jinshi. The company had posted a profit in the same period last year.
Concerns about spending and demand in the artificial intelligence sector pressured SoftBank’s key holdings. Declines in shares of chipmakers Arm and Intel, along with South Korean e-commerce firm Coupang, weighed on the group’s financial results. SoftBank’s Vision Fund, which holds stakes in hundreds of technology startups, recorded a loss of 81.6 billion yen.
SoftBank’s share price, considered a bellwether for investor attitudes towards OpenAI and the broader AI sector, has dropped more than 50% since its record high in June. Worries over the firm’s use of debt to finance large artificial intelligence investments have contributed to this decline. Additional pressure on SoftBank’s stock arose from concerns that projects led by CEO Masayoshi Son could be disrupted if Democrats secured a sweeping victory in the US midterm elections.
While hopes for renewed diplomacy between Washington and Tehran supported purchases on Asian exchanges, continued strain on SoftBank stemmed from portfolio losses and its reliance on borrowing for AI ventures. The impact of these investment setbacks was reflected in the quarter’s results and continued to weigh on the company’s stock value.
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