Asian equities are advancing toward their strongest February performance in history as of February 27, driven by significant investor purchases of companies providing artificial intelligence (AI) infrastructure within the region, fueling this record-breaking rally.

The MSCI Asia Pacific Index has climbed 6.3% for the month, despite a modest gain today. This marks the index's best February performance since its inception in 1998. The gauge is also on track to outperform the S&P 500 Index for a third consecutive month. U.S. stock futures declined on Friday, signaling potential further losses for Wall Street's benchmark indices.

South Korea, serving as a key indicator for AI investment, stands out as the region's top-performing market. The Korea Composite Stock Price Index (Kospi) has surged approximately 18% this month and has skyrocketed 46% year-to-date, establishing itself as the world's best-performing major benchmark index.

Asian markets have outpaced European and U.S. benchmarks as investors flock to companies supporting the expansion of AI infrastructure, viewing regional firms as essential suppliers in the supply chain. In contrast, the disruptive potential of this new technology has been unsettling stocks across various U.S. sectors for weeks, a phenomenon termed "AI anxiety trade."

Global asset managers, overseeing more than $20 trillion in assets, are showing increasing bullish sentiment toward emerging market equities, currencies, domestic bonds, and credit. This growing optimism could provide fresh momentum for the sector's record-breaking advance.

An analysis by Citigroup Inc. of outlooks published by some of the world's largest asset management firms revealed that funds have increased their long positions in Asian, Latin American, and EMEA markets. This development coincides with the MSCI's primary emerging market equity index nearing its historical peak.

The MSCI Asia Pacific Index edged up 0.15% today, bringing its monthly gain to 6.3%. The Kospi has advanced about 18% this month and 46% so far this year.

S&P 500 futures declined 0.4%. Japan's Topix index rose 0.4%. Euro Stoxx 50 futures showed little change.

U.S. Treasury yields held onto their gains, with the 10-year yield hovering near 4%. The yield on Australia's 10-year government bond fell 5 basis points to 4.65%.

The U.S. dollar index was largely unchanged. The euro was virtually flat against the dollar at $1.1794. The yen strengthened 0.1% against the dollar to 155.95. Offshore yuan weakened 0.2% against the dollar to 6.8575.

Spot gold rose 0.2% to $5,192.81 per ounce. With a gain exceeding 6% in February, gold is set for a seventh consecutive monthly increase, which would be its longest streak of monthly gains since 1973.

Bitcoin dipped slightly to $67,288.68, while Ethereum fell to $2,018.49.

WTI crude oil declined 0.4% to $64.98 per barrel.