(May 27): Asian chip stocks stole the spotlight on Wednesday on AI-driven optimism, propelling equities in South Korea and Taiwan to record highs, while currencies barely moved against a steady dollar and elevated oil prices.
Investors continued to look for clearer signs of progress in peace talks between Washington and Tehran, although fresh US strikes on Iran earlier in the week dented optimism around a deal to end the conflict and reopen the Strait of Hormuz.
The MSCI index of EM Asia equities rose as much as 1.3% to a record high. South Korea and Taiwan, which make up more than half of the index, both closed up 2.2% at all-time highs. Markets in Indonesia, Malaysia, the Philippines and Singapore were closed for a public holiday.
South Korea's SK Hynix surged 15% to join rival Samsung Electronics and Micron Technology in the US$1 trillion (RM3.9 trillion) market capitalisation club on an AI-driven rally.
Foreign investors have funnelled billions of dollars into AI-exposed equity markets such as South Korea and Taiwan, lifting inflows in these emerging-market economies.
While South Korea's Kospi index has almost doubled just this year, Taiwan's stock market is closing in on the fifth spot on the global market capitalisation list, powered by a rally in chipmaker TSMC that pushed the benchmark 53% higher.
Nvidia's plans to invest around US$150 billion a year in Taiwan and its view of the region as the "epicentre" of the AI revolution could further boost foreign inflows there.
Among currencies, an MSCI index tracking global EM units was flat. The South Korean won and Taiwanese dollar firmed between 0.2% and 0.5% against the dollar.
The Indian rupee dipped to around 95.77 a dollar, while the Thai baht appreciated to 32.57 per dollar. The Singapore dollar was also flat.
The dollar index slipped to 99.08 against a basket of major currencies, although uncertainty around the US-Iran peace deal remains a major overhang.
"The markets are looking for the next breakthrough: the announcement of an actual peace deal between the US and Iran. If we see a deal and energy prices trend lower, not to mention bond yields, emerging market assets can continue to climb," said Kyle Rodda, senior financial market analyst at Capital.com.
Elsewhere, India's Nifty 50 opened little changed but drifted slightly lower, while Thai stocks rose about 1.6%, mainly driven by Delta Electronics Thailand.
Sri Lankan stocks rose 0.5% while the Sri Lankan rupee edged slightly lower against the dollar following Tuesday's surprise 100-basis-point rate hike, the largest increase in three years. The currency is one of the worst-performing units in Asia this year and is down nearly 5% so far in 2026.
Uploaded by Magessan Varatharaja