Gold Rebounds & Stocks Drop as Risk Mood Sours – Asia Market Wrap

Shares remained under pressure as sentiment deteriorated following fears over AI, which caused a selloff in US tech sectors. Gold and silver recovered in tumultuous trade.

Equity-index futures in the US declined 0.2%, while Asian stocks fell 1.4%, the first drop in six days. Chinese tech stocks fell as investors reduced risks ahead of the Lunar New Year vacations on the mainland and in Hong Kong. Contracts predicted a slow start for European stocks.

As the volatility indicator rose, gold and silver, which had climbed alongside stocks this year, recovered from the previous session’s collapse. Treasuries reversed part of their gains from Thursday, when a risk-off sentiment drove investors to the perceived safety of US government bonds. The benchmark 10-year yield increased by 1 bps to 4.11% ahead of Friday’s US inflation report.

In addition, Asian technology equities have performed nicely, with MSCI’s sector index up 22%. The Kospi Index, a poster child for AI investments, has grown by 31% this year, making it the world’s best-performing stock market.

Oil was on track for its first back-to-back weekly decrease this year, thanks to a risk-off tone in global markets. Goldman Sachs raised Japan’s stocks, anticipating a lift from political stability.