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Asia shares boosted by technology as Iran and rate uncertainty dominate markets

Asian stocks rose Thursday, supported?by gains in technology giants from Wall Street. Meanwhile, lingering U.S. Iran tensions supported oil prices and gold was underpinned by safe-haven flows.

The dollar was a firm currency after minutes of the Federal Reserve's last meeting showed that policymakers weren't in a hurry to lower rates.

The trading was thin in Asia, with Hong Kong, China, and Taiwan closed to celebrate the Lunar New Year. However, MSCI's broadest Asia-Pacific share index outside Japan gained 0.4%, and Tokyo's Nikkei gained 0.70%.

The Kospi index of South Korea has risen by more than 3%, reaching a new record high.

The news that Nvidia had signed a multiyear agreement to sell millions of its artificial intelligence chips, both current and future, to Meta Platforms on Tuesday triggered a surge in the shares of Wall Street's tech giants.

"We needed good news. Tony Sycamore is a market analyst for IG. He said, "I think there's been a general sense of malaise?in the technology sector."

"Nvidia was at the forefront of the rally that we saw through to 2025. And now it could be coming to the rescue... some much needed good news can possibly?set tech shares for a better run up until Nvidia earnings next week."

The European markets were set to open with a mixed performance. EUROSTOXX '50 futures fell 0.11% while FTSE?futures?added 0.15%. DAX futures fell 0.3%.

Nasdaq Futures rose 0.17%, while S&P500 futures climbed 0.11%.

Geopolitics was also prominent in the markets.

Oil prices continued to rise after a surge in the previous session as investors priced potential supply disruptions due to fears of a war between the U.S.

Brent crude futures rose by 0.16% to $70.46 per barrel, after a 4.35% jump in the previous session. U.S. crude gained 0.25% to $65.35 following a 4.6% increase on Wednesday.

Michael Every, senior strategist at Rabobank said that the balance of risk now favors a U.S. attack after Friday's market close. He added that an attack would likely last for weeks, rather than being over "by Monday morning".

Gold, the safe haven, continued to be bid on and remained steady at $4.998.18 per ounce.

FED OUTLOOK

The dollar held gains on Thursday, despite better than expected U.S. data. Minutes of the Fed’s January policy meeting also revealed that several policymakers were open to rate increases if inflation remained high.

The yen fell to a lower level than 155 dollars per pound, achieving 155.26.

Charlie Ripley is a senior investment strategist with Allianz Investment Management. He said: "From our perspective the minutes of the Federal Reserve confirm our belief that rate reductions are off the table in the near future."

While some market participants look at inflation through the rearview mirror, the Fed continues to signal the safety warning that 'objects in mirror are closer than it appears'. Policymakers noted that disinflation may be moving at a slower pace.

The?euro was also pushed down to $1.18, and bought $1.17915 at its last price, due to the news that European Central Bank president Christine Lagarde is planning to quit her position early.

The New Zealand dollar rose 0.07% to $0.5970 after falling 1.4% the previous session. This was due to the central bank of the country calming market expectations that it would make a pivot towards hawkish policy at its meeting.

(source: Reuters)