By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel agrees that the current rally is a relief trade driven by geopolitical de-escalation and commodity price relief, but they differ on its sustainability. While some see it as a dead-cat bounce, others believe it's a repricing of geopolitical risk premiums.
Risk: Persistent input-cost inflation and potential policy hawkishness could snap the risk-on rally quickly if energy or growth surprises reaccelerate.
Opportunity: Selective exposure to sectors less exposed to input-cost shocks.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
(RTTNews) - Asian stock markets are trading mostly higher on Thursday, following the broadly positive cues overnight from Wall Street, amid slightly easing worries about inflation following a drop in commodity prices. Traders are also picking up stocks at a bargain after the recent sell-off due to the escalation in the Russia-Ukraine conflict and stringent sanctions imposed on Russia. Asian markets closed mixed on Wednesday.
Traders also remain optimistic amid the ongoing talks to diffuse the Russia-Ukraine crisis, with Ukraine President Volodymyr Zelensky no longer pressing for NATO membership for Ukraine, a delicate issue that was one of Russia's stated reasons for invading its pro-Western neighbour.
The U.K. and European Union have announced plans to reduce their dependence on Russian energy, although the moves are expected to be far less disruptive to global markets.
The Australian stock market is notably higher on Thursday, extending the gains in the previous session, with the benchmark S&P/ASX 200 moving above the 7,100 level, following the broadly positive cues overnight from Wall Street, aided by a spike in financial, technology and gold mining stocks amid slightly easing worries about inflation following a drop in commodity prices.
The benchmark S&P/ASX 200 Index is gaining 98.20 points or 1.39 percent 7,151.20, after touching a high of 7,161.00 earlier. The broader All Ordinaries Index is up 100.80 points or 1.38 percent to 7,432.60. Australian markets ended sharply higher on Tuesday.
Among major miners, BHP Group and Rio Tinto are losing more than 1 percent each, while Mineral Resources is slipping almost 3 percent, OZ Minerals is down almost 1 percent and Fortescue Metals is declining almost 2 percent.
Oil stocks are lower. Santos and Origin Energy are losing more than 2 percent each, while Beach Energy is plunging almost 9 percent and Woodside Petroleum is slipping almost 5 percent.
Among the big four banks, Commonwealth Bank is gaining more than 2 percent and National Australia Bank is adding more than 3 percent, while ANZ Banking and Westpac are advancing almost 3 percent each. In the tech space, Appen and WiseTech Global are gaining more than 4 percent each, while Block is surging more than 8 percent, Zip is rising almost 6 percent and Xero is adding more than 3 percent. Gold miners are lower. Newcrest Mining and Resolute Mining are down 4.5 percent each, while Evolution Mining is slipping almost 3 percent, Gold Road Resources is declining almost 2 percent and Northern Star Resources is losing more than 2 percent.
In other news, shares in Myer are soaring more than 20 percent after the department store said it will pay shareholders a dividend for the first time in five years despite the company's profits falling by a quarter in the first half.
In economic news, the total number of building permits issued in Australia was down a seasonally adjusted 27.9 percent on month in January, the Australian Bureau of Statistics said on Thursday - coming in at 12,916. That follows the 8.2 percent increase in December. On a yearly basis, permits for private sector houses fell 29.0 percent, permits for buildings excluding houses fell 8.5 percent and total permits sank 24.1 percent.
In the currency market, the Aussie dollar is trading at $0.731 on Thursday.
The Japanese stock market is sharply higher on Thursday, recouping some of the losses in the previous four sessions, with the benchmark Nikkei 225 plunging 900 points to stay just above the 25,600 level, following the broadly positive cues overnight from Wall Street, aided by a spike in across sectors, particularly, financial, technology and exporters amid slightly easing worries about inflation following a drop in commodity prices.
The benchmark Nikkei 225 Index closed the morning session at 25,667.85, up 950.32 points or 3.84 percent, after touching a high of 25,697.23 earlier. Japanese shares ended modestly lower on Wednesday.
Market heavyweight SoftBank Group is gaining almost 3 percent and Uniqlo operator Fast Retailing is adding almost 2 percent. Among automakers, Toyota is advancing more than 4 percent and Honda is gaining almost 5 percent. In the tech space, Advantest, Tokyo Electron and Screen Holdings are gaining almost 4 percent each.
In the banking sector, Mizuho Financial is adding more than 3 percent, Mitsubishi UFJ Financial is gaining almost 4 percent and Sumitomo Mitsui Financial is up 3.5 percent.
The major exporters are higher. Sony and Panasonic are surging almost 7 percent each, while Canon is adding almost 4 percent and Mitsubishi Electric is advancing almost 3 percent. Among the other major gainers, Showa Denko K.K. soaring almost 11 percent and Nissan Motor is surging more than 9 percent, while Recruit Holdings and Nippon Sheet Glass are advancing more than 8 percent each. Shin-Etsu Chemical and AGC are gaining almost 8 percent each, while Suzuki Motor, Hino Motors and GS Yuasa are adding more than 7 percent each. Denso, Japan Steel Works. T&D Holdings and Isetan Mitsukoshi Holdings are up almost 7 percent each.
Conversely, Pacific Motors is losing more than 5 percent.
In economic news, producer prices in Japan accelerated 9.3 percent on year in February, the Bank of Japan said on Thursday. That exceeded expectations for an increase of 8.7 percent and was up from the upwardly revised 8.9 percent in January (originally 8.6 percent). On a monthly basis, producer prices jumped 0.8 percent - again beating forecasts for 0.6 percent but unchanged from the previous month following an upward revision from 0.6 percent.
In the currency market, the U.S. dollar is trading in the 116 yen-range on Thursday.
Elsewhere in Asia, Taiwan and South Korea are soaring 2.6 and 2.2 percent, respectively. Hong Kong, China, Singapore and New Zealand are gaining between 1.5 and 1.9 percent each. Indonesia and Malaysia are up 0.1 and 0.8 percent, respectively.
On Wall Street, stocks showed a substantial move back to the upside during trading on Wednesday after closing lower for four consecutive sessions. The major averages all moved sharply higher on the day, with the tech-heavy Nasdaq posting a standout gain.
The major averages pulled back off their highs going into the close but remained firmly positive. The Dow jumped 653.61 points or 2 percent to 33,286.25, the Nasdaq spiked 459.99 points or 3.6 percent to 13,255.55 and the S&P 500 surged 107.18 points or 2.6 percent to 4,277.88. The major European markets also moved sharply higher on the day. While the U.K.'s FTSE 100 Index spiked by 3.3 percent, the French CAC 40 Index and the German DAX Index skyrocketed by 7.1 percent and 7.9 percent, respectively.
Crude oil prices plunged sharply on Wednesday, a day after recording their highest close in 14 years, after analysts said the U.S. and U.K. ban on Russian oil imports will be far less disruptive to global markets than a full international embargo. West Texas Intermediate Crude oil futures for April ended down by $15 or 12.1 percent at $108.70 a barrel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"The market is rallying on geopolitical optimism while ignoring the accelerating producer price inflation and collapsing construction data that point to a sharp earnings contraction."
The market's relief rally, driven by a 12% drop in WTI crude and diplomatic signals from Zelensky, is a classic 'buy the dip' response to reduced tail-risk. However, the underlying economic reality is deteriorating. Japan’s 9.3% producer price inflation—far exceeding the 8.7% forecast—signals that input cost pressures are not easing, they are accelerating. This creates a massive wedge between equity sentiment and corporate margins. While the ASX 200 and Nikkei 225 are jumping, the 27.9% collapse in Australian building permits is a flashing red light for cyclical growth. Investors are currently trading the headline 'peace' narrative, but they are ignoring the structural stagflationary pressures that will bite in Q2 earnings.
If the drop in commodity prices proves sustained rather than a temporary volatility spike, central banks may have more room to maneuver, potentially preventing a hard landing.
"Oil's plunge below $110/bbl has catalyzed this risk-on snapback by muting inflation fears, powering yen-sensitive sectors like Japanese banks and exporters."
Asian markets' sharp rebound—Nikkei +3.8% to 25,668, ASX +1.4% above 7,150—is a textbook relief rally fueled by Wall Street's bounce, oil's -12% plunge to $109/bbl (easing stagflation fears), and dip-buying after Ukraine-driven selloff. Leaders: Japanese banks (MUFG +4%, Mizuho +3.5%) on USDJPY ~116 yen weakness; exporters (Sony/Panasonic +7%); Aussie banks (NAB +3%, CBA +2%). Tech shines (Block +8%, WiseTech +4%). But glossed over: Australia's Jan building permits -28% MoM (vs +8% Dec) flags housing downturn; Japan's Feb PPI +9.3% YoY (beat 8.7% est) heightens BoJ pressure. Short-term bullish, longer-term vulnerable.
Ukraine talks are fragile—Zelensky's NATO concession unlikely to deter Putin amid sanctions escalation—risking renewed risk-off if talks collapse, amplified by housing weakness in Australia and sticky inflation in Japan.
"This is a relief rally masking underlying demand weakness, not a fundamental reset of inflation risk—the next 48-72 hours will reveal whether geopolitical calm sticks or whether commodity volatility resumes."
The article frames this as a relief rally—geopolitical de-escalation, commodity price relief, bargain hunting. But the data underneath is contradictory. Japan's producer prices accelerated to 9.3% YoY (beating expectations), Australia's building permits collapsed 27.9% MoM, and oil is down 12% in one day after hitting 14-year highs. This isn't inflation easing; it's a sharp demand-destruction scare that spooked commodities. The 'relief' is real, but fragile. The rally is a dead-cat bounce off panic lows, not a structural shift. Watch whether this holds past the initial relief trade.
If Ukraine-NATO negotiations genuinely defuse tensions and energy markets stabilize at lower levels, the inflation pressure does ease materially—especially for Europe. A sustained $100-110 oil could be priced in as 'manageable' versus $130+, making equities genuinely cheaper on a forward basis.
"Near-term upside looks sentiment-driven and fragile; a sustained rally requires inflation to stay tame and energy volatility to stay low."
The article frames a risk-on shift across Asia on cooling inflation signals and Russia-Ukraine diplomacy, with Japan and Australia pacing gains. Yet the rally rests on fragile props: commodity-price relief and geopolitical de-escalation that may fade, and persistent domestic cost pressures (Japan's 9.3% PPI) that could erode margins. A stronger dollar or hotter-than-expected US inflation could sap multi-sector risk appetite, while energy security concerns and sanctions dynamics remain volatile. If growth in China and broader EM slows, APAC earnings multiples may compress even as sentiment remains buoyant. Suggested stance: neutral, with hedges and selective exposure to sectors less exposed to input-cost shocks.
Bullish counter: if inflation stays contained, energy-market volatility subsides, and growth steadies in the US and China, APAC equities could extend the rally beyond current expectations.
"The oil price drop reflects a liquidation of speculative positions rather than a fundamental collapse in global demand."
Claude, you’re misinterpreting the commodity plunge as pure demand destruction. While housing data in Australia is undeniably grim, the 12% oil drop is more likely a liquidity-driven margin call on speculative long positions than a sudden collapse in global consumption. By focusing on demand-side fears, you’re missing the supply-side reality: energy producers are still constrained by years of underinvestment. This rally isn't just a dead-cat bounce; it’s a repricing of geopolitical risk premiums.
"Australia's building permits collapse signals demand destruction that contradicts supply-constrained oil narratives."
Gemini, calling the oil plunge 'liquidity-driven' overlooks Australia's -27.9% building permits plunge as a screaming demand-destruction signal, not just speculative unwind. Housing weakness there (NAB/CBA exposure) plus Japan's 9.3% PPI means stagflation: input costs soaring amid cyclical slowdown. Rally's pricing out recession risk prematurely—NPLs could spike if permits don't rebound.
"Japan's PPI spike is currency-driven, not demand-driven stagflation—a crucial distinction for margin sustainability."
Grok conflates two separate signals. Australia's permit collapse is real demand destruction—housing-specific. Japan's 9.3% PPI isn't stagflation proof; it reflects yen weakness and import costs, not domestic demand collapse. The Nikkei rally on USDJPY weakness to 116 actually *helps* exporters' margins despite higher input costs. Gemini's liquidity-driven oil thesis holds if energy demand (China, global transport) hasn't cratered. We need China PMI data before calling stagflation.
"Housing weakness alone won't justify a durable downturn; margins and policy risks loom as the true test for the relief rally."
Grok, the -27.9% drop in January building permits is a real signal, but using it as a clean 'demand destruction' trigger risks oversimplifying the cycle. Capex-driven housing weakness could coexist with credit resilience if lenders adapt, while margins face real pressure from Japan's 9.3% PPI and FX pass-through. The bigger risk to this relief rally is persistent input-cost inflation and potential policy hawkishness, which could snap risk-on quickly if energy or growth surprises reaccelerate.
The panel agrees that the current rally is a relief trade driven by geopolitical de-escalation and commodity price relief, but they differ on its sustainability. While some see it as a dead-cat bounce, others believe it's a repricing of geopolitical risk premiums.
Selective exposure to sectors less exposed to input-cost shocks.
Persistent input-cost inflation and potential policy hawkishness could snap the risk-on rally quickly if energy or growth surprises reaccelerate.