South Korea's Kospi index soared more than five percent in a tech-led surge across Asia, driven by a forecast-busting earnings report from US chip giant Micron Technology. The regional rally was further supported by a significant drop in oil prices to below pre-war levels, amid growing optimism over US-Iran peace talks and increased ship traffic through the Strait of Hormuz.
Micron's Impact on Tech Stocks
Micron Technology announced fourth-quarter revenue forecasts of $50 billion, significantly exceeding expectations of around $43 billion. This announcement reignited confidence in the AI sector, which has been a major driver of market growth this year. Following the news, South Korean chip giants SK hynix and Samsung saw substantial gains, with SK hynix jumping around 10 percent and Samsung more than five percent.
Regional Market Reactions
Tokyo's Nikkei also rallied, gaining more than three percent as tech giants Advantest and Tokyo Electron powered higher. Markets in Singapore, Taipei, Wellington, Manila, and Jakarta all saw gains, while Hong Kong, Shanghai, and Sydney struggled. The Kospi, Nikkei, and Taiwan's tech-heavy markets have been at the forefront of this year's rally, surpassing Wall Street's performance.
Oil Prices and Geopolitical Developments
Oil prices continued to fall, with Brent sinking to $72.27 and West Texas Intermediate touching $69.05, driven by ongoing negotiations to end the US-Iran conflict and reopen the Strait of Hormuz. Maritime tracking firms reported increased ship traffic through the strait, easing supply fears.
Economic Indicators and Market Sentiment
Traders are now focusing on the release of the personal consumption expenditures index, the Federal Reserve's preferred gauge of inflation, which could influence the bank's interest rate plans. The recent hawkish pivot by the policy committee has increased expectations of a rate hike before the end of the year, driven by elevated inflation from the war-fuelled spike in energy costs.
