​EBC Markets Briefing | Asian stocks down; Eli Lilly and Co gained 10%

Asian stocks faltered as concerns about the exploding costs of AI investment loomed large, though Wall Street futures were attempting a comeback with a rebound in chipmakers.

The yen nursed a fourth straight day of losses ahead of a general election on Sunday where polls are tipping a decisive victory for PM Takaichi whose spending ambitions boosted local equity market.

Still a problematic trend emerges that political survival takes priority over substantive policy outcomes. Proposed massive stimulus and surging government bond yields combined could trigger a debt crisis.

There is top-down pressure from the government to raise wages, as well as a virtuous cycle in place that could benefit domestic demand-related stocks, noted Goldman Sachs.

The country's three largest commercial banks logged record net profit in the first nine months of the current fiscal year, as interest revenue has ratcheted up with BOJ rate hikes. That may offset deeper tech rout.

Some have warned the market is vulnerable to a setback if the election outcome falls short of expectations. Japanese stocks have already outperformed many of their developed-market peers.

The Nikkei 225 maintains the long-term uptrend amid elevated volatility. As long as it holds above the low at 53,490, there is a big chance of making its way back to 55,000.

Asset recap

As of market close on 4 February, among EBC products, Eli Lilly and Co shares led gains after the drugmaker rolled out a strong sales outlook that touted the strength of its weight-loss portfolio.

Lockheed Martin Corporation slipped after DZ Bank downgraded the stock from a buy rating to a hold rating. The shares increased around 31% last month as Trump called for increase in defence spending.

Uranium prices retreated from multi-year highs. The US has floated ambitions to quadruple domestic nuclear capacity, while global uranium production remains below pre-Fukushima levels.

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