Deutsche Bank’s Jim Reid and team report a rebound in Asian equities, led by a sharp rise in the KOSPI and Samsung Electronics on AI chip news, alongside gains in Chinese and Australian indices. In Europe, the STOXX 600 and DAX reached record highs, supported by lower Oil prices, dovish central bank repricing, and German reform announcements that improved domestic sentiment.

Asia rebounds as Europe hits records

“The tech altitude sickness of late is reversing a bit this morning with the KOSPI (+4.60%) back up after a difficult week. The rally has been led by Samsung Electronics, which has surged +8.2% on reports that Anthropic PBC is in discussions with the company to produce a customised AI chip.”

“Chinese equities are also rebounding, with the CSI 300 (+1.15%) recovering after two consecutive losses, while the Shanghai Composite (+0.69%) is posting moderate gains. The Hang Seng (+1.57%) is extending its weekly gain to around +4.0%. In Australia, the S&P/ASX 200 (+1.38%) is trading notably higher, supported by stronger-than-expected services sector activity.”

“This backdrop of lower oil prices and a dovish repricing was generally a very strong one for equities. That was particularly clear in Europe given its exposure to the energy shock, and the STOXX 600 (+1.41%) hit a new record high, as did the DAX (+2.16%).”

“Speaking of Europe, as highlighted earlier, Wednesday saw the German government announce a big reform package, which includes income tax relief, pension reforms, and reductions in red tape.”

“In terms of next steps, the coalition partners have set themselves a clear deadline to implement these reforms by year-end, which should bode well for sentiment and dovetails with our economists’ forecast that growth will pick up in the second half of the year.”

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