Asian AI Rally Creates Uneven Market Landscape

Asian markets are facing mixed signals as the AI chip rally pulls in two directions. On one hand, stocks in South Korea and emerging markets are rising due to increased spending on chips by data centers. The KOSPI index rose 5.1% and the MSCI Emerging Markets Asia Information Technology index gained 2.8%, its highest since July 24.

The rally is driven by upbeat signals from companies like CoreWeave, an AI cloud firm, and Super Micro Computer, a server maker. Analysts at Pepperstone say investors are putting more weight on 'contracted, committed demand' in the supply chain, supporting big memory-chip suppliers like Samsung (+8.8%) and SK Hynix (+8.7%).

However, currencies across Asia remain weak due to high oil prices and the strengthening US dollar. Indonesia's rupiah slid to 17,866 per dollar, while interest-rate futures imply close to even odds of no change versus a quarter-point hike in September.