标签： Asia

After a brutal three-day sell-off that erased hundreds of billions of dollars in market capitalization from South Korea’s equity markets, share prices staged a dramatic rally on Friday, clawing back a large portion of the recent losses. By the afternoon trading session, the country’s benchmark Kospi index surged nearly 17%, with the uptick fueled almost entirely by outsized gains from the nation’s two leading semiconductor manufacturers, SK Hynix and Samsung Electronics.

This sudden turnaround came on the heels of two key developments that restored investor confidence in AI-linked assets. First, positive earnings updates from United States tech giants Amazon and Microsoft rekindled market optimism around the massive capital inflows pouring into artificial intelligence research and infrastructure. Second, South Korean financial regulators rolled out targeted emergency measures designed to curb the aggressive sell-off that had shaken the market earlier in the week.

The rally in AI chip stocks spilled over into other regional markets, lifting benchmark indices in both Japan and Taiwan as bullish sentiment spread across the Asia-Pacific tech sector. For SK Hynix, a key memory chip supplier to AI industry leader Nvidia, share prices closed more than 17% higher on Friday, while Samsung, the world’s largest memory chip maker, notched a 23% gain.

Both companies had seen sharp valuation declines earlier in the week, as a global pullback in AI-related equities gathered steam. Investors had grown jittery over the scale of AI investments being made by large technology firms, with many questioning whether the sector’s sky-high valuations were justified by near-term revenue prospects.

South Korea’s equity markets have seen extraordinary volatility in recent months, driven in part by a surge in participation from retail investors who have piled into tech stocks amid the global AI boom. So far this year, the tech-heavy Kospi has triggered market-wide circuit breakers multiple times; these mechanisms are designed to pause trading temporarily to halt uncontrolled panic selling.

Despite the sharp pullback from the index’s all-time high set in mid-June, the Kospi still holds significant year-to-date gains: after more than doubling in value between January and mid-June, the index remains 50% above its closing level at the end of 2025, underscoring the dramatic run-up that preceded this week’s correction.

After a five-month streak of expansion, China’s manufacturing sector shrank unexpectedly in July, casting fresh uncertainty over the growth trajectory of the world’s second-largest economy, official data released Friday shows.

The National Bureau of Statistics reported that the official manufacturing Purchasing Managers’ Index (PMI) dropped to 49.2 this month, down from 50.2 in June. This reading fell far below economist forecasts, marking the first contraction in factory activity since February 2024.

Breakdowns of the survey data show key underlying metrics also moved into contraction territory. The sub-index tracking new domestic and international orders fell to 48.5 in July, its lowest level since the start of 2023, down from 51.2 in June. Similarly, the production sub-index slipped to 49.9 from 51.4 over the same period.

On the PMI scale, which ranges from 0 to 100, any reading above 50 signals expanding activity, while a figure below 50 indicates a contraction. The July downturn offers the first major insight into China’s economic performance for the second half of 2024, and experts warn the outlook remains challenging.

“This latest PMI reading is an unpromising opening for the first wave of second-half economic data,” Lynn Song, chief economist for Greater China at ING Bank, noted in a recent analysis.

Economists from Capital Economics point to multiple factors driving the unexpected contraction. Softening domestic demand, including a slowdown in construction-related manufacturing output, was the primary drag. Additionally, multiple severe typhoons that hit coastal and southern China in July disrupted port operations, factory production and supply chain logistics, exacerbating the monthly decline.

The July manufacturing downturn comes as China’s broader economy has been grappling with persistent headwinds for months. A years-long downturn in the country’s massive property sector has eroded household consumer confidence, while stagnant wage growth and tight labor market competition have made consumers more cautious about discretionary spending. Sluggish domestic investment and consumer spending have further held back overall growth.

In the April-June second quarter, China’s economy expanded at an annual rate of 4.3%, the slowest year-on-year pace in more than three years. This result falls short of the Chinese government’s official full-year growth target of 4.5% to 5%, putting additional pressure on policymakers to roll out new stimulus measures.

Up to this point, robust export growth, particularly for high-tech goods such as semiconductors and electric vehicles, has been a key pillar supporting China’s overall economic momentum this year. But these sectors are highly capital-intensive, meaning they have generated limited new job growth to ease domestic labor market pressures.

China’s strong export surge has also sparked international trade tensions. The U.S. and other major economies have criticized Beijing for supporting excess industrial capacity across sectors from solar panels to electric vehicles through large state subsidies. These countries argue that as domestic demand slows in China, heavily subsidized cheap Chinese exports are flooding global markets, threatening manufacturing sectors and employment in other economies. Beijing has repeatedly rejected these claims.

Gary Ng, senior economist at French investment bank Natixis, noted that China’s current economic policy framework continues to prioritize productivity growth over expanding domestic household consumption, a structural dynamic that keeps the economy reliant on external demand.

Most economists forecast that China will continue to lean on export growth to prop up overall output for the remainder of 2024. At the same time, top Chinese policymakers have signaled a new push to boost domestic consumption: the ruling Communist Party’s Politburo, the top decision-making body, pledged Thursday to introduce new measures to lift household spending and support sluggish sectors of the economy.

A massive, market-shaking reversal unfolded across Asian equities on Friday, as AI-linked technology stocks mounted a dramatic double-digit rebound just three days after a steep sell-off driven by bubble fears. The recovery was triggered by stronger-than-expected quarterly earnings from Microsoft, which reassured investors that massive corporate investments in artificial intelligence are already translating into solid bottom-line growth.

South Korea’s benchmark Kospi Index led the surge, rocketing 16.5% higher to 6,515.40 by mid-session after opening sharply up and extending gains through early trading. The jump came on the heels of a 17% cumulative drop over the prior three trading days, when investors rushed offload tech holdings amid growing concerns that the global AI boom had become overinflated, and that rising competition from Chinese chip and AI developers would erode the profits of industry leaders.

Blue-chip tech stocks in South Korea led the rebound: Samsung Electronics, the world’s largest memory chip manufacturer, jumped 24.8%, while rival SK Hynix soared 27.8%. Both companies are key suppliers to major AI firms including Microsoft and Google, whose demand for high-performance memory chips has driven their revenue growth over the past two years.

The market turnaround traces directly to Microsoft’s quarterly earnings release Thursday, which reported $90 billion in revenue — beating Wall Street consensus forecasts. The company’s shares surged 15.5% in U.S. trading overnight, marking their best single-day performance in nearly 18 years. The strong results dispelled widespread investor anxiety that heavy AI capital spending would not deliver near-term returns, drawing bargain hunters back to battered tech shares across global markets.

“The market went from throwing AI stocks overboard to fighting for the remaining seats before most traders had finished writing the obituary,” Stephen Innes, senior market analyst at SPI Asset Management, noted in a client commentary Friday.

Even with the historic one-day jump, the Kospi remains far below its June peak of more than 9,000 points, leaving room for continued volatility as investors reassess AI valuations. The rally extended across other major Asian markets as well: Japan’s Nikkei 225 climbed 5.5% to 65,282.21 in early trading, with SoftBank Group — a major early investor in OpenAI — rising 15%, and leading chip equipment manufacturer Tokyo Electron gaining nearly 11%. Taiwan’s Taiex index, heavily weighted toward AI chipmakers, jumped more than 7%, while Australia’s S&P/ASX 200 added a modest 0.5% to 9,015.60.

Beyond equities, currency markets saw significant action driven by suspected intervention by Japanese authorities to prop up the slumping yen. After weeks of trading above 160 yen to the dollar, the greenback plummeted more than 2.4% overnight before bouncing back 0.6% early Friday to 160.59 yen. Japan’s Nikkei financial newspaper reported the intervention was coordinated, with the Federal Reserve Bank of New York conducting a so-called “rate check” to support the move.

The suspected intervention came ahead of the Bank of Japan’s policy meeting concluding later Friday, where the central bank is widely expected to hold interest rates at current levels. Analysts say the timing was designed to head off speculative currency moves tied to the central bank’s policy announcement. Jonas Golterman, emerging markets economist at Capital Economics, noted that past interventions have had limited sustained impact on yen valuations. “Intervention in support of the yen may not work any better now than it has previously, but the persistence of the Japanese authorities suggests to us that the yen will remain around the 160 level this year before staging a more sustained rebound next year,” Golterman wrote in a note. The euro slipped slightly to $1.1515 from $1.1524 against the dollar in early Friday trading.

Oil prices edged higher Friday amid ongoing geopolitical tensions between the U.S. and Iran, which have disrupted shipping through the Strait of Hormuz — the critical chokepoint that carries roughly a fifth of global oil supplies. Brent crude, the global benchmark for oil prices, rose 0.3% to $87.14 per barrel, up from roughly $72 per barrel before the outbreak of conflict between Israel and Iran in late February.

On Wall Street, the rally in tech shares spilled over from Microsoft to the broader market overnight. The benchmark S&P 500 gained 1.7% to close at 7,437.63, the Dow Jones Industrial Average added 1.2% to 52,208.06, and the technology-heavy Nasdaq Composite rose 2.8% to 25,122.18. The positive U.S. session set the stage for the rally across Asian markets when they opened for trading Friday.