Asian Markets Hit New Highs as Tech Rally and AI Optimism Drive Investor Sentiment

Asian Equities Surge on Tech Earnings and AI Momentum

Asian stock markets opened May on a strong note, with Seoul and Taipei reaching record highs. The rally comes on the heels of robust earnings from major technology firms in the US and Asia, reigniting investor enthusiasm for artificial intelligence (AI) and semiconductor sectors. For expats and investors in Thailand and the region, these developments offer both opportunities and cautionary signals as global and regional dynamics shift.

Tech Giants Lead the Charge

The latest quarterly reports from Apple, Google, Microsoft, and Samsung have surpassed market expectations, fueling a renewed appetite for technology and AI-related stocks. South Korea’s SK hynix stood out with a surge of over 10%, while Samsung gained around 4%. Taiwan’s TSMC also saw its shares climb nearly 7%. These gains reflect a broader trend: investors are returning to the AI trade that has driven global equity markets to new peaks over the past year.

• SK hynix: +10% on strong chip demand
• Samsung: +4% amid AI optimism
• TSMC: +7% as global chip demand surges

Hong Kong’s market also benefited from a rally in Chinese tech firms, with Alibaba among the notable gainers. Other Southeast Asian markets, including Singapore, Manila, and Jakarta, posted solid advances, while Tokyo and Shanghai remained closed for holidays.

AI and Semiconductors: The New Growth Engine

For investors and expats in Thailand, the surge in Asian tech stocks underscores the region’s pivotal role in the global AI and semiconductor supply chain. Southeast Asia, while not home to the largest chipmakers, is increasingly integrated into the electronics and tech manufacturing ecosystem. This presents opportunities for those looking to diversify portfolios into regional tech supply chains, logistics, and supporting industries.

The S&P 500’s expected earnings growth of over 27%—the highest in more than four years—highlights the strength of the tech sector. As AI adoption accelerates across industries, demand for advanced chips and related technologies is likely to remain robust, benefiting both established giants and niche players in the region.

Geopolitical Risks: Oil, the Middle East, and Market Volatility

Despite the bullish sentiment, investors must remain vigilant. The ongoing crisis in the Middle East, particularly the closure of the Strait of Hormuz, continues to cast a shadow over global markets. While recent diplomatic efforts—such as Iran’s new peace proposal—have provided some relief, the situation remains fluid. Oil prices have fluctuated in response to these developments, and any escalation could quickly reverse market gains.

US President Donald Trump’s announcement of “Project Freedom”—a humanitarian mission to escort ships through the Strait—adds another layer of uncertainty. While intended to ease supply chain disruptions, it also risks further tensions with Iran, which has warned against foreign intervention in the strait.

Currency Movements: Yen Intervention and Regional Implications

On the currency front, the Japanese yen has stabilized following reported intervention by Japanese authorities, who are said to have spent at least US$32 billion to support the currency. This move reflects broader concerns about currency volatility in the face of shifting global capital flows and geopolitical risks. For expats and investors in Thailand, currency stability remains a key factor in cross-border investments and remittances.

Outlook: Opportunities and Caution for Regional Investors

While the current rally is underpinned by strong fundamentals in the tech sector, seasoned investors recognize that markets have priced in a significant amount of good news. As Chris Weston of Pepperstone notes, the coming weeks will be crucial in determining whether these gains are sustainable or vulnerable to external shocks.

• Opportunities: Exposure to regional tech and AI supply chains, logistics, and supporting sectors
• Risks: Geopolitical tensions, oil price volatility, and potential market corrections

For expats and investors in Thailand, the message is clear: while the AI-driven tech rally offers compelling opportunities, prudent risk management and diversification remain essential in navigating an increasingly complex global landscape.

Source: Free Malaysia Today