Asian chip stocks extended their rally on Wednesday, driven by investor enthusiasm for artificial intelligence, while escalating Middle East tensions lifted Brent crude towards US$100 a barrel amid geopolitical concerns and inflation fears.
Asian chip stocks extended their recent rally on Wednesday as investors continued to favour the artificial intelligence trade, while renewed tension in the Middle East lifted Brent crude towards US$100 a barrel.
South Korea’s Kospi rose 0.5 per cent, helped by gains in SK Hynix, while the MSCI Asia-Pacific index added 0.4 per cent. The move followed a 1.3 per cent gain in New York’s Philadelphia Semiconductor Index, underscoring the breadth of buying across the semiconductor sector.
Risk appetite was mixed elsewhere. S&P 500 futures were little changed in early Tokyo trading, while Hang Seng futures edged up 0.2 per cent. Japan’s Topix gained 0.4 per cent and Australia’s S&P/ASX 200 advanced 0.3 per cent.
Oil markets remained the main source of concern for investors. Brent climbed 1.5 per cent to US$99.37 a barrel after another round of strikes on energy infrastructure in the Middle East, including US attacks near Iran’s Kharg Island export hub. Reuters reported that traders have started to price in more than a 50 per cent chance of a Federal Reserve rate rise in September, as higher energy costs threaten to keep inflation sticky.
Attention is now shifting to the US consumer price index report due on Friday, which could prove decisive for expectations around the Fed’s meeting on September 15 and 16. Economists surveyed by Bloomberg expect headline inflation to rise 0.4 per cent in August, while core CPI is forecast to increase 0.2 per cent, a combination that would leave the annual underlying rate at 2.4 per cent, the weakest since 2021. Meanwhile, the yen strengthened for a third session after comments from US Treasury Secretary Scott Bessent about his insight into Bank of Japan policy added to pressure on the dollar.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
