South Korean stocks and the won led gains across Asian markets on Tuesday, as investors returned to AI-linked trades after a rally in US chipmakers and tech stocks, while Indonesian stocks and the rupiah fell a day ahead of a central bank rate decision.
South Korea's KOSPI index gained as much as 2.3% to its highest since September 8, while the won appreciated as much as 1.6% to a one-week high.
"Korea's September chip exports tripling is a clear sign demand is still strong despite everything that's happening," said Zavier Wong, a market analyst at eToro.
"Investors are simply buying the markets that invoice for it. Korea is also still well below its June high, while Taiwan is back at its own record, and Korean valuations have lagged the earnings, which leaves Seoul with more room if this holds."
Sentiment toward AI stocks improved after last week's sharp selloff, with investors looking past recent industry warnings and focusing instead on signs of robust corporate AI spending, reinforcing expectations for sustained demand for advanced chips and computing infrastructure.
The rebound in US chipmakers and AI-linked heavyweights overnight, coupled with easing oil prices and lower Treasury yields, helped revive appetite for technology shares across Asia's export-oriented markets.
Shares in Taiwan rose as much as 1.9% to a record high and logged their fifth straight session of gains. Wong expects South Korean and Taiwanese stocks to remain supported through year-end, helped by strong demand for memory chips and resilient spending by large technology companies.
Still, gains concentrated in a small group of big semiconductor stocks leave both markets exposed to any fall in memory prices or slowdown in AI-related capital spending.
Meanwhile, Indonesian stocks fell more than 1%, hitting their lowest since August 14.
A Reuters poll showed Bank Indonesia is expected to hold its key interest rate steady at 5.75%, with only a narrow majority expecting a hike by the end of the year.
Recent stability in the rupiah and inflation comfortably within BI's target range have given policymakers room to assess the impact of higher oil prices and tightening global financial conditions before considering further action.
The rupiah depreciated as much as 0.4%, hitting its lowest since August 7.
Outside Indonesia, Asian currencies were broadly firmer against the dollar. The Taiwan dollar gained 0.3%, while the Philippine peso and the Singapore dollar ticked higher.
Elsewhere, Vietnamese leader To Lam said there had been positive negotiations on a trade agreement with the United States, and a deal could be signed soon. Stocks in the country gained as much as 0.8%.
HIGHLIGHTS:
** EU and Philippines reach 'substantial agreement' on free-trade deal
** Trump set for whirlwind UN meetings with wars in Iran, Ukraine on agenda
** South Korean pension fund seeks India government bond investment licence, sources say - Reuters
