By Ankur Banerjee
SINGAPORE, July 10 (Reuters) – Asian stocks rose sharply on Friday, led by chip and AI firms as investors brushed off tit-for-tat attacks escalating between the U.S. and Iran, with the spotlight on the closely watched U.S. market debut of South Korean chip bellwether SK Hynix.
While the renewed back-and-forth attacks have further eroded the fragile three-week-old U.S.-Iran ceasefire, markets have mostly taken in stride the developments in the Middle East, although oil prices and their inflationary impact are back on investors’ radar.
Japan’s bond market and currency lurched higher after Finance Minister Satsuki Katayama said on Friday the government wants to explore ways to encourage pension funds, including the Government Pension Investment Fund (GPIF), to increase their holdings of domestic financial assets.
Brent crude futures were set for a 5% week-on-week rise, the strongest weekly performance since early May. But at $76.73 per barrel, Brent has given up most of the gains it picked up when the conflict began at the end of February.
“I’m looking at updates from the Middle East and things don’t look good, but investors seem incredibly resilient to those risks at the moment, with tech again driving markets higher,” said Nick Twidale, chief market strategist at ATFX Global in Sydney.
Japan’s Nikkei rose 1.8% while South Korea’s KOSPI, the epicentre of the AI rally, gained over 5%. Chip firms SK Hynix and Samsung Electronics were up nearly 3% and 6%, respectively, while Taiwan markets were closed due to a typhoon.
That left the MSCI’s broadest index of Asia-Pacific shares outside Japan 1.8% higher. European futures were 0.24% lower, suggesting some caution in the market.
“We will start on the front foot again in Asia, but I’m still very cautious that we are not pricing in enough event risk that the Strait of Hormuz may be closed again in the coming days,” Twidale said.
Investors have kept their focus on the AI theme that has propelled global stocks to record highs but spurred worries about the sustainability of the rally and high valuations.
Overnight, the tech-heavy Nasdaq ended sharply higher after Micron Technology’s plans to invest more than $250 billion in the U.S. through 2035 buoyed chip stocks, with the Philadelphia SE Semiconductor Index rising 3%.
SK HYNIX U.S. DEBUT AWAITS
Attention will be on SK Hynix’s U.S. market debut later on Friday after the firm priced its American Depositary Receipts at $149 on Thursday, raising about $26.5 billion, indicating strong investor appetite to gain exposure to the AI supply chain.
The blockbuster offering, which will finance new factories and equipment to meet surging AI chip demand, is set to be the world’s second-biggest share sale after SpaceX’s record-breaking IPO last month.
Sam Konrad, investment manager for Asia Equity Income at Jupiter Asset Management, said the listing could mean that the SK Hynix ADR trades at a premium to the local shares, but it could still help re-rate the South Korean-listed shares.
“If SK Hynix re-rates, that should help support a re-rating in Samsung too, especially when they release details of their shareholder return plans,” said Konrad, who holds shares in both South Korean firms.
SK Hynix’s South Korean shares have more than tripled this year, rising 238% and taking the broader benchmark to record highs and making the KOSPI the world’s best-performing major stock market since the start of 2025.
YEN GETS A LIFT
In currency markets, attention remained on the Japanese yen, which firmed sharply after Katayama’s comments suggesting repatriation could be in store for Japanese investors.
It was last 0.4% stronger at 161.69 per U.S. dollar. The frail yen has been hanging around its lowest level in 40 years in recent days as traders kept a watch for official intervention from Tokyo. [FRX/]
Masahiko Loo, senior fixed income strategist at State Street Investment Management, said the announcement is a smart policy signal as markets have increasingly questioned how much firepower the Ministry of Finance has left for intervention.
“With over $1 trillion in FX reserves, intervention remains an option,” said Loo. “But encouraging domestic institutional capital to stay invested at home is a more durable and structural way to support the yen over time.”
The dollar otherwise was mostly muted as investors awaited catalysts to gauge the path of U.S. interest rates. Traders are pricing in 34 basis points of hikes for the year but that may change depending on the inflation pressure from the war.
(Reporting by Ankur Banerjee in Singapore; Editing by Sonali Paul, Jamie Freed and Tom Hogue)