Asian stocks rallied on Tuesday, building on a Wall Street advance driven by tech companies as market participants bought up cheaper shares in the wake of last week’s market correction.
Tech Giants and Chipmakers Power Asian Market Gains
Seoul surged 4.5 percent thanks to strong advances in chipmakers SK hynix and Samsung, leading gains across regional markets. Tokyo jumped almost three percent on the back of rallies in Kioxia, SoftBank, and Tokyo Electron. The Taiex advanced 2.5 percent as both Taiwan’s MediaTek and TSMC gained over two percent, while Wellington, Jakarta, Bangkok, Singapore, Sydney, Shanghai, and Hong Kong also registered increases.
Japan’s Nikkei 225 rose 3.39% to the 60,724 level, closing up 2.9 percent at 60,459.58. South Korea’s Kospi Index rose 4.4% to close at 5,239.13. Hong Kong’s Hang Seng Index rose 0.4% to close at 24,557.04, while the Shanghai Composite rose 0.1% to close at 3,663.72.
The rebound followed a turbulent week that saw chipmakers bear the brunt of a selloff sparked by concerns over artificial intelligence spending. Friday’s US stock slump delivered a jolt of volatility after disappointing earnings from technology giants intensified concerns about the durability of the AI-driven rally, pushing the Cboe Volatility Index to its highest intraday level since April.
SPI Asset Management strategist Stephen Innes noted that the recovery reflected positioning changes rather than a sudden return of broad market confidence.
The market rallied because the sellers stepped away, not because the entire buy-side suddenly rediscovered their courage,
Stephen Innes, SPI Asset Management
Innes added that companies receiving large capital expenditure cheques continued to outperform the businesses writing them. Semiconductor demand trends are supported by fourth-quarter projections from TSMC that point to year-over-year gains of 55 percent to 60 percent for December and November, according to Banca Akros analysts. Infineon Technologies also raised its sales forecasts for data centres for the coming financial year, while positive signals from Infineon and TSMC fueled optimism during the European trading session. On the Milan Stock Exchange, buying favored Technoprobe, Prysmian, and STMicroelectronics, alongside Be Semiconductor and ASM International in Amsterdam. Concurrently, European stock markets traded higher, with the FTSE MIB, Paris CAC 40, Frankfurt DAX 40, and Amsterdam AEX all advancing, and London’s FTSE 100 rising 0.8% to close at 10,865.19.
In New York, the Dow closed up 2.2 percent at 52,389.75, the S&P 500 rose 2.3% in its biggest gain since April 8, and the Nasdaq 100 surged 3.4% following a nearly 7% jump in a chipmaker gauge, despite a 4.3% slump in Nvidia Corp. as regulators investigate Chief Executive Officer Jensen Huang following his admission of an affair with a woman identified in reports as a suspected Chinese spy, and as shareholders filed a fraud lawsuit against Huang and the company.
Meanwhile, Anthropic prepared to launch the formal placement phase of its mega IPO, with CEO Dario Amodei scheduled to discuss the initial public offering with JPMorgan Chase & Co. CEO Jamie Dimon during a live-streamed event, though a leaked prospectus on Monday briefly added tension by indicating a fundraising target of $69.3 billion before being withdrawn as out of date.
Oil Prices Retreat on Middle East Diplomacy
Energy markets dropped further as traders bet on a resolution to the Middle East crisis. Brent North Sea crude fell 1.5% to $91.15 per barrel, after slumping almost six percent in the previous session to below $92 a barrel and its lowest since August. West Texas Intermediate fell 1.7% to $85.34 per barrel.
Commenting on market conditions, Brock Weimer at Edward Jones noted that economic conditions continue to be viewed as supportive of corporate fundamentals. E*Trade from Morgan Stanley strategist Chris Larkin noted that while the week did not close the door on volatility, the action reflected investors repositioning within the AI trade rather than abandoning it.
Carol Lye, portfolio manager and senior research analyst at Franklin Templeton, stated on Bloomberg Television that the Federal Reserve remains intensely focused on inflation, suggesting that as inflation comes down, the central bank may pause, while a gauge of the dollar remained little changed after falling 0.5% on Monday.
Earlier coverage: Asian Stocks Rise as Oil Slides After US Midterms; Kospi Chip Selloff
