Asian stocks up as investors look past Mideast attacks
Asian stocks rose sharply, led by chip and artificial intelligence firms, as investors ignored concerns about a stalled energy supply recovery in the critical Strait of Hormuz and tit-for-tat attacks between the United States and Iran increased.
The renewed back-and-forth attacks have further eroded the fragile three-week ceasefire and put a spotlight on oil prices and what that might mean for the outlook for inflation and global interest rates.
Brent crude futures contracts will rise 5 percent this week, their strongest weekly performance since the beginning of May. But at $76.03 a barrel, Brent has given up most of the gains it made when the conflict began in late February.
“I’m looking at the updates coming out of the Middle East and things don’t look good, but investors seem incredibly resilient to those risks at the moment, with technology driving markets back up,” said Nick Twidale, chief market strategist at ATFX Global in Sydney.
Japan’s Nikkei index rose 1.8 percent, while South Korea’s KOSPI index, the epicenter of the AI rise, gained 2.4 percent in early trading. Chip leaders SK Hynix and Samsung increased by 3 percent. Taiwanese markets were closed.
This caused MSCI’s broadest index of Asia-Pacific shares outside Japan to rise 0.76 percent.
“We’ll start on the front foot again in Asia, but I’m still very cautious that we haven’t priced in enough risk of an event that the Strait of Hormuz will close again in the coming days,” Twidale said.
Investors turned bullish this week, focusing instead on the artificial intelligence theme that has driven global stocks to record highs but raised concerns about the sustainability of the red-hot rally.
The tech-heavy Nasdaq closed sharply higher overnight, with the Philadelphia SE Semiconductor index rising 3 percent following Micron Technology’s plan to invest more than $250 billion in the United States through chip stocks in 2035.
Attention will be on the SK Hynix, which will hit the US market later on Friday, after the firm priced the American Depository Receipts at $149 on Thursday; This represents an increase of approximately $26.5 billion, indicating strong investor appetite for participation in the AI supply chain.
The blockbuster offering, which will fund new factories and equipment to meet growing demand for AI chips, would be the world’s second-largest share sale after SpaceX’s record-breaking IPO last month.
Sam Konrad, investment manager for Asian Equity Income at Jupiter Asset Management, said the listing could mean ADR is trading at a premium to local shares but could still help re-rating SK Hynix shares listed in Korea.
“If SK Hynix re-ratings, it will help support Samsung Electronics’ re-rating as well, especially when it announces details of its shareholder return plans,” said Konrad, who holds shares in both South Korean firms.
SK Hynix’s Korean shares have surged an eye-popping 238 percent this year, pushing the benchmark to record highs and making KOSPI the world’s best-performing major stock market since the start of 2025.
But the AI craze has also led to sharp volatility in recent weeks as investors worry about sky-high valuations and worry about the sustainability of massive profit growth.
All eyes in foreign exchange markets are on the Japanese yen, which is at a 40-year low as traders watch for official intervention from Tokyo. It last reached 162.18 per US dollar; That wasn’t far off from its 1986 low of 162.84 last week.
The dollar remained mostly muted as investors awaited catalysts that would gauge the course of U.S. interest rates. Investors are pricing in a 34 basis point increase for this year, but that could change depending on inflationary pressures caused by the war.
Among commodities, gold is expected to lose 1 percent for the week and is trading at $4,113 per ounce in early trading.
