Asia stocks rebound after tech-led selloff; Australia trade data in focus

Asian stock markets rebounded on Thursday, led by Japan (+1.5%), China (+1.4%), and Hong Kong (+1.6%), as easing concerns over tech valuations spurred buying, with Chinese chipmakers also benefiting from reports of a potential ban on foreign AI chips in state data centers. This recovery followed a tech-led selloff, while Australia reported a significantly widened trade surplus of A$3.94 billion in September driven by strong exports. Regional bank earnings were mixed, with National Australia Bank shares falling nearly 4% despite meeting profit expectations, DBS Group rising 3% on record Q3 income, and United Overseas Bank dropping 3.5% after a 72% profit slump and a reduced 2026 net interest margin outlook.

Analysis

Asian equity markets experienced a broad rebound on Thursday, with Japan's Nikkei 225 rising 1.5% and China's CSI 300 gaining 1.4%, following a tech-led selloff in the prior session. This recovery was attributed to easing concerns over stretched technology valuations and natural profit-taking after recent strong gains. Hong Kong's Hang Seng TECH sub-index surged over 2%, partly driven by a Reuters report suggesting Beijing's plan to ban foreign AI chips in state data centers, boosting domestic chipmakers.

Australia's trade surplus significantly widened to A$3.94 billion in September, up from A$1.11 billion, primarily due to a strong rebound in commodity exports. Concurrently, the U.S. Supreme Court began hearings on the legality of Trump-era tariffs, with justices expressing doubts over the sweeping use of emergency powers, potentially impacting global trade policy.

Regional bank earnings presented a mixed picture, influencing individual stock performance. National Australia Bank (NAB) shares declined nearly 4% despite reporting full-year net profit in line with expectations, albeit slightly lower year-over-year. In contrast, DBS Group shares rose 3% on record Q3 total income, while United Overseas Bank (UOB) saw its shares drop 3.5% after a 72% net profit slump due to credit provisions and a projected lower 2026 net interest margin.

Key Decisions for Investors

• Monitor tech sector volatility and valuation sensitivity, particularly in Asian markets, as recent movements suggest ongoing investor scrutiny of growth prospects.
• Assess the implications of evolving trade policies, such as China's potential ban on foreign AI chips, on global technology supply chains and related corporate earnings.
• Conduct granular analysis of regional bank fundamentals, differentiating between institutions with strong wealth management and deposit growth versus those facing credit provision challenges and declining net interest margins.
• Consider the resilience of commodity-exporting economies, like Australia, while closely tracking developments in global trade policy that could influence future export performance.