Asian tech stocks surge as AI optimism revives

Policy effects and tech strength push South Korea and Taiwan markets to record highs

MSCI Emerging Markets Index also hits highest level in four years

South Korea's KOSPI hit a record high at 3,314.53, up 1.67% from the previous day. On the back of policy measures such as the return to the major shareholder capital gains tax threshold and amendments to the Commercial Act, AI-related tech stocks and defense industry stocks bought by foreign investors showed strength. SK Hynix jumped 5.56%.

Taiwan's market also set a record high as TSMC announced that August sales rose 34%, and the index rose 1.36% that day.

The MSCI Emerging Markets Index rose 0.8% that day to reach its highest level in four years. TSMC, whose stock rose 2.08% in the Taiwan market, accounted for about one-quarter of the MSCI Emerging Markets Index's gains.

Japan's Nikkei 225 also climbed 0.8%. Semiconductor equipment maker Advantest rose 3.27% that day, surpassing Tokyo Electron to top a market capitalization of 10 trillion yen (about 95 trillion won) for the first time.

Hong Kong's Hang Seng Index gained 1.1%, and the Shanghai Composite rose 0.13%.

Emerging market stocks posted a four-day rally, the largest since June. Bloomberg noted that positive outlooks for tech companies had a greater effect than increasing geopolitical risks in Europe and the Middle East.

Nenad Dinik, emerging markets equity strategist at Bank Julius Baer in Zurich, said, "September's rally in emerging markets was mainly driven by a positive mood toward Asian tech, a weaker U.S. dollar and increased expectations of Federal Reserve rate cuts." He added, "It also appears that the period of greatest U.S. tariff uncertainty has passed, which supports steady capital inflows."

Oracle provided an extremely optimistic earnings outlook on AI infrastructure building the previous day. As a result, its shares jumped nearly 30% before the open, and renewed expectations for AI lifted U.S. stock index futures.

S&P 500 futures rose 0.3%. Nasdaq futures were up 0.2%. Dow Jones Industrial Average futures fell 0.2%.

NVIDIA and TSMC ADRs also rose about 2.5% and 1.6%, respectively, in premarket trading.

Wall Street expects that even if the producer price index (PPI) released that morning shows significant inflationary pressure, severely deteriorated employment data would still not prevent the Federal Reserve Board from cutting rates.

Guest reporter Jeong-A Kim kja@hankyung.com