The Japan Times - Asian stocks mostly up as traders weigh AI, oil dips after surge

Fresh optimism over artificial intelligence has provided a boost to the tech sector in recent weeks, with investors upbeat about the upcoming earnings season.

But confidence wobbled after the Financial Times reported that OpenAI, the maker of ChatGPT, expected to make $50 billion in annualised revenue this year, far less than the $70 billion flagged previously.

However, Bloomberg later cited unnamed sources as saying the firm expected to hit the original estimate.

Chris Weston at Pepperstone said "the discrepancy may reflect differences in revenue measurement rather than an outright deterioration in OpenAI's underlying business".

Still, he said, "in a market where valuations are increasingly dependent on ambitious revenue and cash flow projections, the headlines have been enough to trigger a meaningful one-day repositioning".

Wall Street's Nasdaq ended more than one percent lower, with Nvidia down nearly three percent, while Microsoft, AMD and Amazon among others sharply lower.

But Asia enjoyed mostly gains as early selling was pared back.

Hong Kong, Shanghai, Sydney, Mumbai, Wellington, Bangkok, Manila and Jakarta were all up, while US futures rallied.

Tokyo ended flat, having clawed back big morning losses though tech investing titan SoftBank lost more than two percent, while Kioxia nearly four percent.

Seoul and Taipei -- both heavily weighted with tech firms -- were closed for holidays.

London, Paris and Frankfurt rallied at the open.

"The big test comes as earnings season gets going over the next few weeks, when the companies writing the biggest checks for AI tell us whether they’re still prepared to keep writing them," said Josh Gilbert at eToro.

Traders were also cheered by a drop in oil prices after US President Donald Trump ruled out hitting Iran before the midterm elections, saying Washington was holding "productive discussions" with Tehran.

His remarks came after reports said the White House had asked the Pentagon to draw up plans for a possible attack ahead of the November 3 vote, hoping a show of strength might help struggling Republicans' chances.

Both main contracts slipped almost one percent Friday, though that is after they fell as much as four percent on concerns about increased Iranian strikes in the Strait of Hormuz.

That comes on top of Yemen's Houthis taking aim at Riyadh airport with missiles and warning staff at oil facilities in Saudi Arabia to leave to avoid being targeted as hostilities escalate.

Comments from Fed officials cemented expectations for another interest rate hike before the end of the year, though this month appears unlikely.

Governor Christopher Waller said more tightening was likely necessary to bring prices under control, while St. Louis Fed boss Alberto Musalem eyed increases over the next six to nine months.

Still, National Australia Bank's Ken Crompton said: "Whilst this is a touch hawkish relative to his (Waller's) recent record, he's still in close accord with (Vice Chair Philip) Jefferson and (New York Fed chief John) Williams last week, who collectively (in addition to the inflation data) helped cool market pricing of an October hike."

- Key figures at around 0715 GMT -

Tokyo - Nikkei 225: FLAT at 68,030.92 (close)

Hong Kong - Hang Seng Index: UP 1.7 percent at 24,178.27

Shanghai - Composite: UP 0.1 percent at 3,7813.79 (close)

London - FTSE 100: UP 0.8 percent at 10,528.21

West Texas Intermediate: DOWN 0.8 percent at $90.74 per barrel

Brent North Sea Crude: DOWN 0.9 percent at $103.35 per barrel

Euro/dollar: UP at $1.1227 from $1.1213 on Thursday

Pound/dollar: UP at $1.3236 from $1.3228

Dollar/yen: UP at 158.24 yen from 157.92 yen

Euro/pound: UP at 84.82 pence from 84.77 pence

New York - Dow: UP 0.1 percent at 51,231.64 (close)

H.Hayashi--JT