Asian stocks extend gains as US rebounds, chipmakers lead
- MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.2% as South Korea's Kospi jumped more than 6%
SINGAPORE: Stocks jumped at the start of trading in Asia on Wednesday as investors took cues from a rebound in US markets, shrugging off climbing oil prices as Houthi rebels threatened to open a front in the widening Middle East conflict.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.2% as South Korea’s Kospi jumped more than 6%. Japan’s Nikkei 225 gained 1.9%, while S&P 500 e-mini futures edged 0.1% lower.
Brent crude nudged 0.6% higher to $91.55 a barrel after two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday after threats of attack from Yemen’s Iran-aligned Houthis.
“Equity markets shrugged off geopolitical risks, focusing instead on tech sector returns,” Westpac analysts wrote in a research report.
“After large losses in recent days, semiconductor stocks bounced back.”
Overnight, the S&P 500 was up 0.9%, snapping a three-day losing streak, driven by a rebound in semiconductor shares after data showed Korean semiconductor exports almost tripled during the first few weeks of July and a gauge of Taiwanese export orders for June topped estimates.
Market focus will turn to earnings from Alphabet, which is facing heightened investor scrutiny over the delayed launch of a model key to its AI ambitions, and Tesla, which is widely expected to report its first quarterly cash burn in over two years as its spending on AI and robotics soars.
Pharmaceuticals will also be in focus after US President Donald Trump said all generic drugs brought into the United States will carry a tariff of 0% for two years from August 1, after which the rate will rise to 100% for one year and 200% thereafter.
The U.S. dollar index , which measures the greenback’s strength against six currencies, held near a one-week high of 101.20. Against the yen , the dollar was down 0.1% at 163.06 yen, weakening slightly after setting a four-decade high against the Japanese currency on Tuesday.
The jump in oil prices, which settled at a five-week high on Tuesday, did little to unsettle bond and currency markets ahead of central bank meetings next week. Among them, the U.S. Federal Reserve is set to keep its key interest rate steady for the rest of 2026, according to the median forecast of economists in a Reuters poll, though they said the chance of a rate hike is high.
Fed funds futures indicate that though one hike by December is probable, a hike of 50 basis points or more by the end of the year is a coin toss, the CME Group’s FedWatch tool showed.
The yield on the U.S. 10-year Treasury bond was up 0.2 basis point at 4.628%. Gold was up 0.5% at $4,097.67.
In cryptocurrencies, bitcoin was up 0.3% at $66,611.73, while ether climbed 0.7% to $1,936.18.