Asian technology shares extended their advance on Tuesday, but the momentum proved difficult to sustain in South Korea, where the KOSPI surrendered most of an early surge. The retreat may serve as a cautionary signal for Japanese investors as the Nikkei 225 prepares to reopen on Thursday after a three-day holiday break.
The KOSPI finished the session roughly 0.5% higher, a sharp pullback from an intraday jump of more than 2% shortly after the open. Samsung Electronics closed up about 0.7%, while SK Hynix reversed an earlier gain to finish down approximately 1.5%. The initial rally was fueled by a record close on the Nasdaq Composite and a 4.3% surge in the Philadelphia Semiconductor Index on Monday.
Meta's new Muse AI assistant has revived enthusiasm around AI infrastructure spending, lifting shares of AMD, Intel, and Arm on Wall Street. Lower oil prices and easing US Treasury yields added to the risk-on mood early in the session. However, profit-taking quickly eroded the gains, with SK Hynix's late reversal underscoring that the buying interest was not broad enough to sustain the opening move.
Kiwoom Securities analyst Han Ji-young told MoneyToday that the combination of weaker oil, lower US yields, and renewed confidence in Meta's AI ecosystem had created a favorable environment for Korean semiconductor shares. She also noted that the decline in WTI from above $100 had removed one of the biggest macro pressures on equities.
Nikkei 225 faces catch-up risk
Japan's cash market remains closed through Wednesday, leaving the Nikkei 225 frozen at Friday's close of 65,018.95. Tokyo reopens on Thursday after three consecutive holidays, meaning the index has yet to absorb Monday's record Nasdaq close, Tuesday's Asian chip rally, falling oil prices, or developments ahead of Thursday's Trump-Xi meeting.
The yen is adding another layer of complexity. It weakened to around 157.5 per dollar on Tuesday despite the Bank of Japan raising rates to 1.25% last week. Markets were disappointed by two dissenting votes and the absence of a stronger signal that another increase is imminent. Capital Economics senior markets economist James Reilly told the Japan Times that the BOJ had again failed to generate sustained yen strength, leaving the currency increasingly dependent on developments in US rates.
Broader Asia backdrop supportive
Elsewhere in the region, Taiwan's Taiex finished about 0.2% higher after hitting a record during the session, while Hong Kong's Hang Seng gained roughly 0.6% and mainland Chinese stocks advanced around 0.4%. Brent crude held near $101 a barrel after falling sharply from last week's near-$110 peak, while the US 10-year Treasury yield eased towards 4.95%. Both moves reduce pressure on energy-importing Asian economies and expensive technology shares.
Citi Research noted that positioning remains unusually bearish across the Nikkei and KOSPI, creating scope for sharp short-covering rallies if positive catalysts persist. The fading rally in Korea, however, suggests that investors may be cautious about chasing strength, a dynamic that could also play out in Tokyo when trading resumes.
This article is for informational purposes only and does not constitute financial advice.
