AI optimism propels South Korea, Taiwan shares to record highs

BENGALURU: Artificial intelligence-linked stocks in South Korea and Taiwan climbed on Tuesday, helping both markets notch record closing highs, as investors shrugged off overnight worries about AI’s potentially disruptive impact on software and other sectors.

Currencies in emerging Asian economies inched lower against the dollar index that clawed back losses as investors assessed the global trade impact of renewed turbulence surrounding US President Donald Trump’s tariff regime.

Analysts at MUFG said export-oriented currencies such as the South Korean won, Malaysian ringgit and, to a lesser extent, the Chinese yuan were better positioned to weather Trump’s tariffs, while the Indian rupee

and Indonesian rupiah were likely to lag.

The Philippine peso shed 0.3 percent, while the Thai baht

and Indonesian rupiah lost 0.4 percent and 0.2 percent, respectively.

The MSCI index of emerging Asian equities climbed 0.7 percent to a record level, buoyed by a 2.1 percent rise in South Korea’s KOSPI and a nearly 3 percent gain in Taiwan stocks . The two tech-heavy markets account for about 40 percent of the MSCI index.

The regional IT gauge climbed 3.2 percent to an all-time high.

Overnight, Wall Street came under pressure amid concerns over AI’s disruptive impact and Trump’s erratic statements on trade policy.

Despite the broad weakness, South Korean shares extended their rally, closing at an all-time high of 5,969.64, around 30 points below the 6,000 level.

Investors are now focused on AI bellwether Nvidia’s earnings, due on Wednesday.

“The market knows that if Nvidia guides strongly again, it will help reinforce the whole AI supply chain narrative, and Korean memory producers sit right in the middle of all that,” said Zavier Wong, a market analyst at eToro.

“So in some sense, this looks like pre-positioning around that expectation, with some confidence already priced in.”

Taiwan stocks also closed at an all-time high of 34,700.82, with top contract chipmaker TSMC up 3.4 percent.

Tight advanced-node order books and sustained earnings momentum should keep global money rotating into Taiwan, with confidence in demand and margins supporting tolerance for concentration risk, Wong said.

Thai shares were flat as investors braced for the Bank of Thailand’s policy decision on Wednesday, where the central bank is widely expected to stand pat on interest rates, as per a Reuters poll.

Malaysian and Singapore shares both lost 0.5 percent, while Philippine stocks climbed 0.9 percent.