Market Commentary: Wednesday 4th February

Global markets were mixed as software stocks across Asia fell sharply, tracking declines in U.S. peers amid growing fears that advances in artificial intelligence could disrupt traditional software business models.
Shares of major firms such as Tata Consultancy Services, Infosys, Xero, and Nomura Research Institute slid after AI start-up Anthropic launched a productivity tool aimed at in-house lawyers, signalling direct competition with software-as-a-service providers.
Despite tech weakness, the MSCI Asia Pacific Index edged slightly higher as gains in traditional sectors offset losses, with investors increasingly betting that the long tech-led rally is giving way to broader market participation.

Elsewhere, oil prices rose for a second day after the U.S. Navy shot down an Iranian drone near an aircraft carrier in the Arabian Sea, underscoring geopolitical risks and lifting Brent crude to around $68 a barrel.
Gold rebounded above $5,000 an ounce on dip buying and safe-haven demand, while the yen weakened ahead of Japan’s snap election amid expectations of fiscal stimulus under Prime Minister Sanae Takaichi.
Chinese solar stocks jumped following reports of visits and orders linked to SpaceX and Tesla, while Bitcoin ticked higher after hitting a one-year low, even as some investors warned its downturn could worsen.
European stock futures edged lower, rounding out a cautious global market backdrop.

On the data front, PMI figures are due across Europe today, alongside U.S. ADP non-farm employment and the ISM Services PMI.

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