BofA analysts see AI investment demand broadening across industries
Asian equity markets largely fell on Tuesday, according to the Associated Press. Japan’s Nikkei 225 dropped 1.6% to 68,098.54, South Korea’s Kospi reversed an early surge to close 0.6% lower at 6,933.60, and Hong Kong’s Hang Seng slipped 0.6% to 25,289.88. The Shanghai Composite lost 0.5% to 3,963.53.
Australia’s S&P/ASX 200 rose 0.2% to 9,088.60, the session’s regional exception.
The declines came as oil prices rose on supply concerns tied to the war in Iran and inflation worries persisted, pressures the Associated Press said outweighed support from strong corporate earnings reported by Asian companies after robust U.S. results. Japan imports almost all of its oil, the AP noted.
In a report for BofA Securities, analysts Masashi Akutsu and Tetsuhiro Tokuyama said demand from AI investment has broadened across a wide range of industries. “First, the beneficiary base from AI investment has broadened. Demand spread across a wide range of industries, including semiconductor production equipment, power equipment, machinery, electronic components, and materials,” the analysts said. “AI demand effectively helped rediscover globally competitive companies across these sectors.”
For the session, energy costs and inflation concerns outweighed the support from earnings across most of the region, with Australia’s S&P/ASX 200 the only benchmark among those reported to close higher.