Asian stocks are concluding a remarkable quarter, with many markets poised for significant gains driven by the boom in artificial intelligence and semiconductor companies. Japan's Nikkei is set for over a 36% rise, South Korea's Kospi is up nearly 65% for the quarter, and Taiwan's benchmark is expected to exceed a 40% increase. This strong performance, particularly in tech-heavy regions, comes despite a trend of foreign investors selling South Korean equities, with $17.3 billion leaving the market this year, reflecting portfolio rebalancing and profit-taking rather than fresh institutional buying, according to BNY macro strategist Geoff Yu.
The global market landscape also saw a resurgent dollar, which recorded its fourth consecutive quarterly rise. This strengthen dollar pushed the Japanese yen to a 40-year low of 162.41 per dollar, prompting concerns about potential intervention from Japanese authorities. Finance Minister Satsuki Katayama stated that authorities are ready to respond appropriately. Concurrently, gold experienced its largest quarterly fall in over a decade, dropping 14%, partly due to the dollar's strength.
Oil prices have significantly declined, with Brent crude futures settling at $72.49 a barrel, marking its largest quarterly drop since 2020 and reflecting a decline of almost 40% over the past three months. This drop is attributed to the receding worries about the conflict that previously affected oil supply, although the ceasefire remains strained. This fall in oil prices is seen as reinforcing a view of more trend-like global growth and contributing to better earnings outlooks, as noted by JPMorgan Asset Management's Kerry Craig. In contrast, Hong Kong's Hang Seng index lagged, closing the quarter with a 7.5% decline.
