Henderson FAR East Income Limited

Asian equities rose in August. They were boosted by the recovery of artificial intelligence (AI)-related stocks, although rising bond yields (falling prices) and concerns about inflation limited overall gains. Chinese equities marginally weakened as manufacturing activity slowed, despite continued strength in exports supported by artificial intelligence (AI)-led demand. Indian stocks weakened as higher oil prices and concerns about further US monetary policy tightening hurt investor sentiment. However, it emerged at the end of the month that second-quarter GDP grew by 7.8% year on year, which beat expectations. Taiwanese and South Korean equities were among the strongest performers, given their greater exposure to technology stocks that may benefit from the development of AI infrastructure. South Korea's central bank raised interest rates because of inflation risks and continued GDP growth, marking the second hike in as many meetings. In developed Asian markets, Singapore equities outperformed. The local benchmark Straits Times Index hit another all-time high, helped by solid corporate results, continued economic growth and further gains in banking stocks.