Asian markets found support from semiconductor stocks on Thursday, as investors snapped up shares of Samsung Electronics and SK Hynix after a recent selloff. The rebound helped lift benchmarks in Japan and South Korea, but the broader macro environment remained under pressure from a surge in oil prices tied to renewed US-Iran tensions.
Chipmakers Drive Regional Gains
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8%, while Japan's Nikkei 225 climbed 2.3%, breaking a three-day losing streak. South Korea's KOSPI jumped 3.8%, led by a 3.6% rise in Samsung Electronics and a 7.5% surge in SK Hynix. The rally followed a modest recovery on Wall Street, where the Nasdaq eked out a 0.2% gain despite early weakness.
Nvidia rose 3.6% after reports that China may allow leading AI firms to purchase a limited number of its H200 chips, easing some concerns about demand for advanced processors. This suggests investors still see value in the AI supply chain after this week's rout, though conviction remains fragile. Earlier in the week, Samsung's strong earnings guidance failed to prevent profit-taking, highlighting lingering caution.
For a deeper look at SK Hynix's positioning in the AI memory market, see our analysis: SK Hynix ADR Listing: A Stronger AI Memory Play Than Micron or SanDisk.
Oil Shock Revives Inflation Fears
The larger risk came from crude markets. Brent crude rose 0.8% to $78.65 a barrel and was up about 9% for the week, briefly trading above $80 for the first time since June 22. The rally extended after former President Trump said the interim agreement with Iran was "over" and US forces launched fresh strikes aimed at keeping the Strait of Hormuz open. Trump later said he did not expect a return to full-scale war, which helped markets recover from session lows.
Still, the damage to the inflation outlook was clear. Higher energy prices hit bond markets and lifted expectations that the Federal Reserve may need to tighten policy again this year. Fed funds futures now imply 38 basis points of tightening in 2024, back near levels seen a week ago. Minutes from the Fed's June meeting showed several policymakers were already concerned about inflation, with some seeing a case for higher rates before agreeing to hold steady.
Bond Yields Climb Globally
Bond yields rose across markets. Japan's 10-year yield reached 2.880%, its highest since 1996, while Australia's 10-year yield touched its highest level since early June. The US 10-year yield added to overnight gains, rising to 4.5852%. For context on Japan's yield move and its impact on equities, see: Nikkei 225 Bullish Pattern Emerges as Kioxia Rebounds, Japan Yields Surge.
Currency moves were quieter. The dollar slipped 0.2% to 162.38 yen, still near levels that keep Japanese intervention risk alive.
The split market reflects a tug-of-war between dip-buying in AI-related stocks and wariness over an energy shock that could force central banks to maintain tighter policy for longer. Investors are balancing optimism about semiconductor demand against the macro headwind of rising oil prices and bond yields.
This article is for informational purposes only and does not constitute financial advice.
