Asian Markets Rise on AI Demand and US-China Talks

Asian stock markets mostly recorded gains on Monday morning, supported by global demand for artificial intelligence technology and positive signals from trade talks held over the weekend between Chinese and US officials.

Monday Morning Market Movements

Hong Kong's main index posted a half-percent increase an hour after trading began on Monday morning. South Korea's technology-heavy benchmark index experienced a strong jump of 1.5 percent, while shares in Shanghai gained 0.5 percent. The Tokyo market remained closed due to a public holiday, while Sydney's main index saw a slight decline.

Critical Contacts Between the US and China

US and Chinese economic officials met on Sunday for closely watched talks to discuss trade and artificial intelligence issues ahead of a summit planned for Thursday in Washington. US Treasury Secretary Scott Bessent stated following the lengthy discussions that the two countries discussed establishing a communication channel named the 'US-China AI Dialogue'. Chinese state media described the talks as candid, in-depth, and constructive.

Monetary Policies of Global Central Banks

The US Federal Reserve's decision to raise interest rates on Wednesday, alongside central banks' moves to rein in inflation, had caused global markets to close mixed last week. The Bank of Japan raised interest rates on Friday to their highest level in three decades, while the yen depreciated against the dollar amid concerns that the pace of rate hikes might be slower than expected. This followed tightening steps by the European Central Bank and the US Federal Reserve at the beginning of the month.

Oil Prices and Developments in the Energy Market

The lack of signs indicating an end to the war between the US and Iran and persistently high oil prices continue to increase pressure on global monetary authorities. Saudi Arabia's move to restart approximately half of its crude oil shipments during the day following a disruption at its East-West pipeline opening to the Red Sea sparked hope. Although oil prices registered a decline on Monday morning following Friday's drops, both major crude oil contracts continue to hover around $100, well above pre-war levels.