economy
Goldman Sachs says AI and energy resilience are creating a North-South divide in Asian markets
North Asian markets are outperforming South Asian markets, supported by stronger fiscal ability and AI developments, Goldman said.
TL;DR
- North Asian markets are outperforming South Asian markets due to better energy shock insulation and stronger fiscal ability.
- AI developments are a key driver, with tech stocks dominating indexes in Taiwan, South Korea, and Japan.
- South Korea and Taiwan are the best-performing markets, with South Korea up over 80% year-to-date.
- Concerns exist about the sustainability of high valuations for Korean semiconductor stocks.
- Japan's market is viewed positively due to political stability, earnings growth, and AI robotics.
- China's A-shares are outperforming H-shares, supported by policy and a move out of deflation.
- China's H-shares are lagging due to weaker earnings in internet application stocks, which are less directly tied to the AI hardware trade.
- The meeting between Xi Jinping and Donald Trump resulted in a calm relationship, appreciated by both sides amidst global geopolitical tensions.
- A potential energy supply shock could lead to a market correction in the summer months.