Rising yields and oil prices clash with AI surge in Asian stock markets

HSBC's head of equity strategy for Asia-Pacific, Herald van der Linde, sees Asian equities caught between pressure from rising bond yields and oil prices and the momentum of the AI boom. After the latest U.S. rate increase, he turned a little more positive, citing that much of the Fed impact is already reflected in prices. He stresses that AI is the only dominant growth story, making it crucial to differentiate between markets rather than treat the region as a monolith.

Currency risk is highlighted, with dollar-pegged Hong Kong and managed-float Taiwan facing different challenges than depreciating currencies in Indonesia and India. South Korea and Taiwan benefit most from AI, while other markets like Japan and ASEAN show mixed prospects, and Greater China grapples with weak consumer confidence and property slowdown.