South Korea’s Kospi index experienced a substantial rise, climbing nearly 18% on Friday. This surge followed a rebounding trend in Wall Street’s AI-related stocks, which had previously suffered losses. U.S. futures showed a 0.5% increase, while oil prices dipped over 1%.
The Kospi opened strong and ultimately rose 17.9% to 6,695.45. This marks the largest single-day gain in its history. Notably, tech companies like Samsung Electronics and SK Hynix saw significant increases, surging 28% and 30%, respectively.
Despite Friday’s increase, the Kospi remains below its June peak of over 9,000. In recent days, the index had lost over 17%, largely due to investor concerns about an AI market bubble and intensified competition from Chinese rivals.
The rebound was influenced by Microsoft’s report of robust quarterly profits. These profits suggested that heavy investment in AI is yielding financial returns. Microsoft’s stock soared 15.5%, marking its best single-day performance in nearly 18 years. Investors returned to the market, eager to purchase shares in tech companies.
European markets also advanced. Germany’s DAX increased by 1% to 25,870.09, France’s CAC 40 climbed 1% to 8,570.48, and Britain’s FTSE gained 0.8% to 10,983.31.
In other parts of Asia, Tokyo’s Nikkei 225 rose by 4% to 64,362.02. SoftBank Group and Tokyo Electron experienced gains of 13.8% and 6.2%, respectively. Market analyst Stephen Innes commented on the rapid shift back to AI investments during this time.
The U.S. dollar recovered compared to the Japanese yen, appreciating 0.5% to 160.28 yen. Market intervention by regulators in both Japan and the U.S. appeared likely. The Bank of Japan decided to maintain interest rates, and analysts believe officials made moves to restrict volatile trading linked to this decision.
The Federal Reserve kept its interest rate unchanged, underscoring a rate gap between Japan and the U.S. that affects yen value. Jonas Golterman from Capital Economics predicts the yen will stabilize around 160 before a more pronounced recovery next year.
Taiwan’s Taiex benefited from a broad gain, leaping 8%, with TSMC contributing a 10% increase. Australia’s S&P/ASX 200 inched up 0.1%, while Hong Kong’s Hang Seng rose 0.1%. The Shanghai Composite Index climbed 0.7%.
An official report indicated China’s factory activity diminished in July, marking the first decline in five months. Analysts attribute this to reduced local demand and recent typhoon impacts. The Chinese economy grew by 4.3% in the April-June quarter, the slowest rate in over three years.
Oil prices saw declines amid ongoing U.S.-Iran tensions keeping the Strait of Hormuz largely inactive. Brent crude fell by 1.4% to $85.70 per barrel, while U.S. crude decreased 1.6% to $82.23 per barrel. There were indications of improving oil flows through the strait, easing supply pressures.
On Wall Street, the S&P 500 increased by 1.7%. The Dow Jones Industrial Average grew by 1.2%, and the Nasdaq composite rose 2.8%.