Tech Stocks Rally While Oil, Energy Shares Drop: Markets Wrap

(Bloomberg) -- European equity futures climbed and Asian stocks fluctuated after another record high on Wall Street. Oil dropped as concerns eased about Israel attacking Iranian energy facilities.

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Technology shares outperformed in Asia, following their US counterparts higher, while oil and energy stocks dropped after the Washington Post reported that Israel doesn’t plan on striking Iranian oil or nuclear facilities. Treasury yields ticked lower on Tuesday as the dollar gained against most of its Group-of-10 peers.

MSCI’s Asia Pacific Index rose as much as 0.7% on the back of the chip sector, with the likes of Taiwan Semiconductor Manufacturing Co. leading the advance, then erased those gains. Japan’s Nikkei 225 Stock Average Index reached its highest levels since July. Benchmarks in Australia and Taiwan also advanced.

“APAC-region investors are likely to take a more risk-on approach as we head into the end of the year, bolstered by an improving macro background in the region,” said David Chao, a global market strategist at Invesco Asset Management. “As long as oil holds steady and the Fed continues to cut rates, I think Asian currencies and risk assets are likely to outperform.”

With earnings reports poised to drive US sentiment this week, the S&P 500 gained almost 1% on Monday, notching another record — its 46th this year. That’s a hint investors are not deterred by the reduced forecasts for third-quarter results and are instead betting on positive surprises.

The Nasdaq 100 added 0.8%. Nvidia Corp. led gains in megacaps, Apple Inc. gained on a bullish analyst call and Tesla Inc. rebounded after last week’s plunge. Goldman Sachs Group Inc. and Citigroup Inc. advanced ahead of results.

However, shares in China and Hong Kong slid, with investors on the watch for further stimulus from the Chinese government. Equity benchmarks in the country had risen on Monday even after a highly anticipated Finance Ministry weekend briefing lacked specific new incentives to boost consumption in the world’s biggest crude importer.

China may raise 6 trillion yuan ($846 billion) from ultra-long special government bonds over three years as part of its efforts to boost the sputtering economy, Chinese media outlet Caixin reported.