Asian stocks were broadly higher, with South Korea in sight of entering a bull market, while Tencent fell. Large-scale investments in Samsung Electronics and other companies are raising concerns about pressure on profit margins.
Asian stocks were broadly higher on signs of easing US inflation. Major markets, including the Hang Seng Index, China, Shanghai and Taiwan, were firm, while South Korea's KOSPI extended its advance to a 4th straight trading session. Samsung Electronics and SK Hynix led the market higher, with reports that Singaporean state investment company Temasek Holdings plans to make a direct investment providing an additional catalyst.
Meanwhile, Tencent Holdings fell 3.8% in Hong Kong. Although quarterly revenue exceeded market expectations, the stock declined on concerns over increased AI investment. Capital expenditure surged 176% year on year and 65% from the previous quarter, prompting views that the huge outlays will weigh on margins over the medium to long term. Morgan Stanley and Goldman Sachs have lowered their price targets.
Australian stocks continued to decline. An assistant governor of the Reserve Bank of Australia suggested that inflation risks could move higher, indicating the possibility of further rate hikes, while also saying that the effects of previous rate increases were curbing consumption.