Most Asian equity markets moved higher on Wednesday as technology shares continued to drive gains and a string of company results supported sentiment across the region.
Japan and South Korea each recorded fresh intraday highs, with export-oriented sectors in Tokyo bolstered by a weaker yen and South Korea lifted by strength in semiconductor and automotive names. Australia also reached a record level, supported by a strong earnings update from retail heavyweight Woolworths and robust performances by major mining companies.
Regional markets took some feed from Wall Street's overnight session, where S&P 500 futures were modestly firmer - rising about 0.1% by 22:14 ET (03:14 GMT) - as investors positioned ahead of earnings from AI-focused chipmaker Nvidia. Market participants remained attentive to how much AI demand will influence software and hardware vendors, a theme that has driven both rallies and recent bouts of volatility.
U.S. political developments offered limited direct guidance for Asian bourses, though trade policy remained a source of uncertainty. President Donald Trump said he planned to pursue his tariff agenda without seeking Congressional approval, even after a significant portion of that regime was struck down by the U.S. Supreme Court, leaving the outlook on trade measures unclear for export-reliant economies.
Japan and South Korea reach records
Japan's Nikkei 225 surged nearly 2% to a record 58,319.0 points, driven largely by gains in technology-related stocks and exporters benefiting from a softer yen. South Korea's KOSPI climbed over 2% to a record 6,122.98 points as semiconductor and automotive names outperformed.
In Seoul, Hyundai Motor (KS:005380) jumped as much as 10%, approaching its own record high after reports that the company is planning a multi-billion-dollar investment in the country. Memory-chip leaders Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660) each rose roughly 2%, also touching record levels in the run-up to Nvidia's closely watched results.
Attention has centered on Nvidia, with the world's most valuable company expected to report strong earnings growth when U.S. markets close on Wednesday. The key focus for investors is whether Nvidia's report will continue to signal robust AI-driven demand across the semiconductor and software supply chains.
Recent weeks have seen AI-related concerns weigh on global markets, particularly in Hong Kong, where sizable declines had been recorded. On Wednesday, Hong Kong's Hang Seng regained some ground, rising 0.8% as local technology names recouped a portion of earlier losses.
Australia sets new high despite hotter CPI
Australia's ASX 200 climbed more than 1% to a record intraday peak of 9,130.30 points. The market was buoyed by a strong half-year update from Woolworths Ltd (ASX:WOW), which reported robust results and signaled the current period was off to a positive start.
Major miners also contributed to the Australian advance. BHP Group Ltd (ASX:BHP), Rio Tinto Ltd (ASX:RIO) and Fortescue Metals Group Ltd (ASX:FMG) all rose between about 1.8% and 2.7%, with Fortescue leading the group after delivering a strong half-year earnings result.
These gains came despite a hotter-than-expected consumer price index print for January, which showed core inflation moving further above the Reserve Bank of Australia's target range. That inflation outcome increases the prospect of further policy tightening - the RBA lifted rates by 25 basis points earlier this month - and ANZ analysts flagged a higher likelihood of an additional rate hike as soon as May. Higher rates pose downside risks for some locally-sensitive equity sectors, according to market commentary.
China, India and other Asian markets
Mainland Chinese benchmarks extended their advance following the post-Lunar New Year reopening. The Shanghai Shenzhen CSI 300 and the Shanghai Composite each rose about 1.2%, building on a strong session the previous day as markets returned in better shape after the holiday period amid hopes for lower U.S. trade tariffs and firmer consumer spending during the break.
India's Nifty 50 gained around 0.6% in morning trade, supported by a partial rebound in software stocks that had faced steep losses in recent weeks. Singapore's Straits Times Index slipped roughly 0.1%.
Overall, the regional rally was led by technology and export-oriented sectors, while consumer discretionary and mining names contributed in markets where corporate results were favourable. Uncertainties remain around trade policy, AI-related market disruption and the timing of further interest-rate moves in Australia, all of which could influence performance in coming sessions.
Key points
- Japan's Nikkei 225 and South Korea's KOSPI each reached record highs, powered by technology and exporters.
- Australia's ASX 200 also hit a record high, supported by Woolworths and strong mining sector earnings despite hotter-than-expected CPI data.
- China extended gains after the Lunar New Year break; Hong Kong tech stocks recovered some losses, while India and Singapore showed mixed moves.
Risks and uncertainties
- Trade policy remains uncertain after U.S. tariff measures were partially overturned by the Supreme Court and comments that tariffs may be pursued without Congressional approval - a risk for export-driven sectors.
- AI-related market disruption continues to be a source of volatility for technology and software stocks, with upcoming Nvidia earnings a focal point for investor expectations.
- Hotter-than-expected Australian inflation raises the probability of further RBA tightening, which could negatively affect interest-rate sensitive sectors and local equities.