Asian stocks saw a strong rebound, with broader markets closing higher. This positive sentiment was largely fueled by increasing hopes for a de-escalation in the U.S.-Iran conflict, as former President Donald Trump indicated progress in negotiations for a comprehensive deal. Positive cues also came from a record-high close on Wall Street, as investors were encouraged by reports of breakthroughs in discussions between U.S. and Iranian officials. In response to these developments, oil prices experienced sharp losses, with Brent crude holding near $94 a barrel after previously rising to $97, as market participants anticipated a potential resolution or lessening of hostilities.
The South Korean KOSPI index was a standout performer in Asia, surging by nearly 7% to reach a new record high of 7,411.62 points. This significant rally was primarily driven by substantial gains in chipmaking stocks. Notably, Samsung Electronics Co. Ltd. saw its valuation cross $1 trillion for the first time ever, following a nearly 14% increase in its share price. SK Hynix Inc. also surged by over 10% to hit a record high. These chipmakers have benefited from robust AI-fueled demand over the past year, coupled with accelerating prices for their advanced memory products due to supply shortages. Beyond the tech sector, South Korean markets were also lifted by April's consumer price index inflation data, which was in line with expectations, suggesting that the Bank of Korea's measures to control inflation were effective.
Other Asian markets also performed positively. Chinese shares, including the Shanghai Shenzhen CSI 300 and SSEC indexes, both rose by over 1% as trading resumed after a long holiday weekend. This was further supported by stronger-than-expected private purchasing managers' index data for April, which indicated an uptick in services activity. Hong Kong's Hang Seng index climbed 0.9%, also aided by gains in the technology sector. Australia's ASX 200 added 0.9%, recovering after 10 declines in the previous 11 sessions, despite the Reserve Bank of Australia's hawkish outlook and interest rate hike on Tuesday aimed at addressing inflationary risks from the Iran conflict. The tech rebound extended beyond Asia, with the Philadelphia semiconductor index up by more than 5.5% and Intel surging 11% in the US session. Alphabet also announced plans to raise $20 billion to fund its AI spending initiatives.
