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Tech momentum drives Asian indices higher as declining volatility paves the way for a positive European opening

Risk appetite shifts from Wall Street to Asian markets, supported by the strength of the US services sector and massive technology investments. Data from the Institute for Supply Management (ISM) showed strong growth in the US services sector, with the index recording 55.4, exceeding expectations, which pushed the NASDAQ index up by 1.40%. This strong performance helped calm recession fears, leading to a -5.79% decline in the VIX volatility index. The widening of the US trade deficit to -88.6, resulting from increased imports of AI infrastructure, reflects continued capital expenditure in tech sectors, providing a solid foundation for European markets to open on an optimistic note. The Asian session saw notable gains, with the Hang Seng index jumping +2.02%, while the KOSPI index recorded a 1.38% rise, driven by US companies announcing a $2 billion injection into Korean technology and energy sectors. This rise comes despite a -3.6 decline in Japanese household spending, indicating that investors are currently focusing on technology growth opportunities and foreign capital flows rather than weak domestic consumer data in some parts of the region.