Brent Rises, Stocks Continue to Gain on Tech Rally – Asia Market Wrap

Asian equities rallied after softer-than-expected US inflation data prompted traders to scale back expectations for further Fed rate hikes, while renewed optimism around AI boosted technology shares. MSCI’s Asia Pacific Index climbed 2%, marking its strongest gain in a month, with South Korea’s Kospi surging 7% to reclaim its position as the world’s best-performing major equity benchmark this year.

The semiconductor sector remained in focus following Tuesday’s volatility, with SK Hynix jumping 11% in Seoul. The company’s US-listed shares continued to outperform after their recent debut, pushing the ADR premium above 50% relative to the Seoul-listed stock and reinforcing strong investor demand for AI-related chipmakers.

The Dollar weakened against most G10 currencies as lower US rate expectations weighed on the currency. Gold gave back part of Tuesday’s rally, falling 0.6% to around $4,030/oz as risk appetite improved despite the more supportive interest rate outlook.

Chinese equities were little changed after mixed economic data. Retail sales unexpectedly rose 1% in June following a 0.6% decline in May, while industrial production increased 5.3%, beating forecasts. The urban unemployment rate eased to 5.0% from 5.1%, although GDP growth slowed, highlighting persistent challenges in the broader economy.

In oil markets, traders remained focused on refined fuel products as gasoline and diesel markets in the US and Europe, which signaled record tightness. Escalating tensions in the Middle East have heightened concerns over potential supply disruptions, raising the risk of further increases in fuel prices for consumers already facing elevated costs at the pump.