Key Points
- South Korea’s benchmark index surged more than 6 per cent
- Japan’s Nikkei gained nearly 2 per cent
- Chip stocks rallied on strong export data
ISLAMABAD: Asian equities climbed for a second consecutive session on Wednesday, led by semiconductor stocks, as investors took encouragement from a rebound in US markets and stronger-than-expected technology-related trade data.
MSCI’s index of Asia-Pacific shares outside Japan rose 1.2 per cent, extending gains from the previous session.
South Korea’s Kospi jumped more than 6 per cent, its strongest performance among major regional benchmarks.
Meanwhile, Japan’s Nikkei 225 advanced 1.9 per cent. Taiwan’s market also posted gains, underscoring renewed optimism around the global semiconductor sector.
The rally followed a solid session on Wall Street, where the S&P 500 rose 0.9 per cent, and the Nasdaq Composite gained 1.3 per cent. The US traders snapped a three-day losing streak.
Investors returned to technology stocks after recent volatility, with semiconductor firms benefiting from data. The latest data figures show South Korean chip exports nearly tripled in the first weeks of July, and Taiwanese export orders exceeded expectations in June, according to AP News.
Resilient Asian stocks
Market participants appeared willing to overlook mounting geopolitical risks, including threats by Yemen’s Houthi movement against shipping in the Red Sea.
Two oil tankers carrying Saudi crude reportedly reversed course after security concerns intensified, adding to worries about global energy supplies. Despite the tensions, equity markets remained resilient.
“Equity markets shrugged off geopolitical risks, focusing instead on tech sector returns,” analysts at Westpac said in a research note, adding that semiconductor stocks were rebounding after steep losses in recent trading sessions, according to Metrobank Wealth Insights.
Oil prices continued to edge higher, however, potentially complicating the outlook for inflation and monetary policy.
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Brent crude rose around 0.6 per cent to $91.55 a barrel, while U.S. West Texas Intermediate crude also advanced. Analysts warned that sustained increases in energy prices could renew inflationary pressures, particularly in import-dependent economies such as Japan.
Elsewhere, Hong Kong’s Hang Seng Index bucked the regional trend, slipping as investors booked profits in major technology names.
Mainland Chinese equities, meanwhile, recorded modest gains, supported by advances in artificial intelligence and semiconductor-related companies.
Investors are now turning their attention to a busy earnings calendar in the United States.
Results from Alphabet and Tesla are expected to provide fresh insight into consumer demand, artificial intelligence spending and broader corporate sentiment.
Markets are also closely monitoring comments from the US Federal Reserve for clues on the path of interest rates in the second half of the year.
The latest market moves highlight the growing influence of semiconductor companies on global equities.
After a sharp correction earlier this month, investors appear to be betting that demand tied to artificial intelligence infrastructure, data centres and advanced computing will continue to underpin earnings growth across the technology sector.
