BENGALURU: Stocks in South Korea and Taiwan extended their record rallies on Wednesday, lifted by renewed optimism over artificial intelligence demand and growing expectations of a US Federal Reserve rate cut.
The MSCI index of emerging Asia stocks jumped nearly 1 percent to its highest level in almost five years, led by South Korea and Taiwan, which together account for more than a third of the gauge.
South Korean shares climbed 1.8 percent to a record 4,084.09, reigniting their rally after a brief pause, as SK Hynix reported record quarterly profit.
The Nvidia supplier said memory chip supply remains tight amid surging demand from artificial intelligence data centers.
Wall Street also hit fresh highs overnight after upbeat updates from Nvidia and Microsoft, with Nvidia announcing USD500 billion in AI chip orders and plans to build seven supercomputers for the US Department of Energy.
Taiwan’s benchmark gained 1.6 percent to a new peak just below 28,400, with TSMC up 2.7 percent after Nvidia said it was producing chips at the company’s Arizona facilities.
“The record-high levels in both equity markets reflect more than just a US tech play,” said Glenn Yin, Director of Research at AC Capital Market.
“While the global AI boom has clearly provided a spark, given the region’s deep semiconductor exposure, the rally is also underpinned by improving earnings revisions, strong export numbers, a softer dollar and the prospect that global risk appetite remains strong.”
Investors awaited the US Federal Reserve’s closely watched policy decision later in the day, with markets almost fully pricing in a 25-basis-point rate cut.
Trade developments were also in focus, with US President Donald Trump set to meet Chinese President Xi Jinping in South Korea on Thursday.
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