BENGALURU (Aug 12): Most Asian stocks gained on Wednesday, led by South Korean equities as solid results for artificial intelligence (AI)-linked US stocks boosted risk plays, while regional currencies were subdued on higher oil prices ahead of key US data.
The MSCI emerging-market Asian equity index rose 1.1% as upbeat capital expenditure plans and forecasts from AI cloud firm CoreWeave and Super Micro Computer bolstered confidence that the AI investment boom still has room to run.
Tech-heavy Kospi closed 3.7% higher. Its recent declines into bear market territory marked a steep pullback from AI-related stocks on anxiety surrounding the sustainability of massive capital expenditures.
Chipmaker Samsung Electronics closed up 6.7%, and SK Hynix ended 5.5% higher.
"Asia is reading the AI story more selectively than Wall Street is," said Dilin Wu, a research strategist at Pepperstone.
Elsewhere, Jakarta's benchmark led gains in Southeast Asia with a 1.2% rise. Stocks in the Philippines and Malaysia followed with gains of 0.6% and 0.3% respectively.
Singapore stocks eased 0.7% after scaling record high levels last session.
Currencies, however, remained tepid with soaring oil costs continuing to drag import-reliant economies. The US and Yemen's Iran-aligned Houthis reported separate attacks on shipping, while Asia was rattled by an early morning missile launch by North Korea.
The Indonesian rupiah extended its weakness into another session, shedding as much as 0.3% to trade at 17,885 per US dollar.
The Singapore dollar slipped marginally to 1.2805 per US dollar. The South Korean won shed 0.3% after its July rally placed it among the region's few year-to-date gainers alongside the Singapore dollar and the Chinese yuan.
Markets awaited the US inflation report due later in the day, for fresh clues on the US Federal Reserve's (Fed) next move.
"If the consumer price index is hot, thin current account buffers and US dollar debt is where the pain lands. Peso and rupiah are most exposed. The won is also vulnerable," said Wu at Pepperstone.
Fed funds futures imply even odds of the central bank leaving rates unchanged and a quarter-point increase at its September meeting, according to CME Group's FedWatch tool.
India's equity benchmark Nifty 50 fell 0.7%, with Tata Group stocks among the biggest drags on the benchmark after the resignation of conglomerate Tata Sons' chairman. Tata Consultancy Services, India's largest software exporter, slid 4%.
Beyond Asia, Brazilian markets were weighed by a combination of stronger-than-expected inflation, hawkish central bank minutes and a JPMorgan downgrade of local equities. The benchmark stock index slid 2.5% on Tuesday to its lowest closing level since mid-January, while the real also came under pressure.
Highlights:
- Taiwan's Foxconn reported a 35% rise in second-quarter profit on AI demand, beating forecasts
- Bank of Korea is likely to raise interest rates further, its outgoing deputy chief said
- US consumer prices likely increased moderately in July as gasoline prices eased
Uploaded by Tham Yek Lee