A powerful wave of optimism is sweeping across most of Asia on Friday, with markets confidently tracking a record-setting rally on Wall Street that has brazenly shrugged off the political chaos of a US government shutdown.
But this bullish conviction has met a formidable wall of resistance in India, where the market has opened sharply lower, creating a stark and dramatic divergence on a day of otherwise resilient gains.
Overnight, all three major US benchmarks closed at new record highs, a clear and defiant signal that investors are, for now, completely unperturbed by the political impasse in Washington.
That optimism has crossed the Pacific, with Japan’s Nikkei 225 climbing a formidable 1.11 percent and Australia’s S&P/ASX 200 also rising.
The OpenAI effect strikes again
The star of the session is the Japanese conglomerate Hitachi, whose shares have skyrocketed nearly 8 percent.
The explosive rally was ignited by the news, announced late Thursday, that the company has forged a partnership with the AI titan OpenAI to build artificial intelligence infrastructure and data centers across the globe.
The deal is another powerful testament to the market-moving power of the OpenAI brand, a force that has been a key driver of the global tech rally.
This tech-led optimism has helped the Japanese market shrug off a mixed bag of domestic economic data.
While the country’s services sector showed solid growth in September, a steeper decline in manufacturing meant that the private sector as a whole expanded at its slowest rate since May.
A sharp reversal on Dalal Street
While most of the region is enjoying the rally, a very different story is unfolding on Dalal Street. The Indian market has opened sharply in the red, with the Sensex tumbling 205 points to trade below the 24,800 level.
The sudden and sharp reversal is a worrying sign for a market that has been under intense pressure and highlights the fragile state of investor sentiment.
The one bright spot in a sea of red is Tata Steel, which has managed to buck the trend with a 3 percent gain.
A market flying blind
This divergent session is playing out under the long and uncertain shadow of the U.S. government shutdown.
The political crisis has now led the Labor Department to pause all its activities, a move that includes the cancellation of the scheduled release of the September nonfarm payrolls report on Friday.
This data blackout means the Federal Reserve will be deprived of a crucial piece of economic information ahead of its next interest rate decision.
While this removes a potential negative catalyst for the market, it also adds to a growing sense of uncertainty as a new and unpredictable week approaches.
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