Asian stocks rose on Wednesday after a U.S. inflation report came in below expectations, reducing concerns about another Federal Reserve rate increase. South Korea’s benchmark index recorded its strongest performance in over five weeks.
The MSCI emerging-market Asia index increased by up to 3.5%, with South Korea’s Kospi leading the gains at 6.2%. Chipmakers drove the advance—SK Hynix rose 8.8% and Samsung Electronics climbed 6.3%, together making up more than half of the index’s movement.
U.S. consumer prices grew at their slowest rate in over two years, lowering the chances of a July rate hike. The shift sent the dollar and Treasury yields down, while shares of Nvidia and Micron Technology jumped in overnight trading.
“That sentiment carried over directly to Seoul and the broader chip sector,” said Inki Cho, a senior financial market strategist at Exness. He added that SK Hynix’s American depository receipts had already surged 27% before the Seoul market opened, setting the tone for the session.
Still, risks remain. Analysts warned that earnings slowdowns, foreign investor portfolio adjustments, and leveraged exchange-traded funds tied to SK Hynix and Samsung could disrupt the rally.
In Taiwan, stocks gained 2%, though TSMC, the largest contract chipmaker, closed just 0.8% higher after briefly rising 1.7%. The firm, a key supplier to Nvidia and Apple, accounts for 43% of Taiwan’s benchmark index.
The dollar’s decline helped emerging Asian currencies stabilize. The South Korean won briefly reached a two-month high of 1,484.5 against the dollar before retreating. Expectations of a more aggressive Bank of Korea, ongoing semiconductor strength, and attractive valuations supported the currency.
The central bank is set to raise interest rates on Thursday for the first time in over three years. A poll suggested another increase may follow by year-end. Elsewhere, the Singapore dollar and Malaysian ringgit inched up, while the Thai baht fell 0.2%.
Singapore’s stock market reached its ninth straight record high, rising as much as 1.2% on gains from major banks. The index has climbed over 7% this month. In Indonesia, equities extended a five-day winning streak, and the rupiah traded at a one-week high.
The gains reflect improved sentiment, but the region’s reliance on global tech demand and central bank policies makes it vulnerable to sudden shifts. While the near-term outlook is positive, investors are watching earnings season closely.
Jeffrey Hendrik, CEO of the Indonesia Stock Exchange, announced plans to add 37 stocks to its list of companies with highly concentrated shareholdings. The move follows a warning from index provider MSCI earlier this year.
South Korea’s Finance Ministry stated it expects to meet MSCI’s developed market criteria by early 2027, which could draw more foreign investment.
The economic impact of recent global disruptions has also influenced market behavior. For context, earlier downturns showed how quickly sentiment can shift.
