Asia-Pacific stock markets extended Wall Street's overnight gains on Wednesday, as renewed enthusiasm for AI-related trades combined with SK hynix's strongest quarterly results in history to push regional markets broadly higher, while investors awaited directional signals from the Federal Reserve's rate decision and earnings reports from tech giants.
On Wednesday, the MSCI Asia-Pacific Index rose 0.8%, with South Korea's KOSPI leading gains and at one point expanding its intraday advance to 6%. SK hynix's robust earnings drove semiconductor stocks including Samsung Electronics higher across the board, rapidly boosting market sentiment. Japan's Nikkei 225 rose more than 1%, while Australia's S&P/ASX 200 gained 0.8%.
In commodities, Brent crude rebounded sharply by 1.6% from the previous two consecutive days of declines. Gold edged down 0.35%, with spot gold quoted at approximately $4,045 per ounce.
U.S. Treasury yields changed little, with the 10-year yield holding near 5.00%. The dollar index was essentially flat. Meanwhile, the Reserve Bank of New Zealand unexpectedly held rates steady, sending the New Zealand dollar down more than 1%, with the NZD posting its largest single-day drop against the Australian dollar since 2017.
SK hynix's Record-Breaking Earnings Lift Semiconductor Sector
On Wednesday, South Korea's KOSPI surged 6%, prompting the Korea Exchange to activate the SIDECAR mechanism, halting program buying. The KOSPI 200 index at one point approached a 7% gain.
SK hynix on Wednesday reported third-quarter results, with operating profit surging more than sevenfold year-on-year to 83.33 trillion won, far exceeding market expectations of 77.5 trillion won. Quarterly sales exceeded 100 trillion won for the first time, reaching 104.62 trillion won, up 328% year-on-year.
The company simultaneously announced a shareholder return plan for 2026 with a total scale of 100 trillion won (approximately $75 billion), including no less than 30 trillion won in cash dividends and no less than 60 trillion won in share buybacks and cancellations.
The news propelled SK hynix shares continuously higher, driving Samsung Electronics up more than 8% as well.
Counterpoint Research Director MS Hwang said SK hynix's results confirmed the continued strength of AI hardware demand.
AI trading enthusiasm also spread to Japanese stocks, with Japan's chip and electronic hardware sectors surging across the board, as the semiconductor supply chain supported the Nikkei 225's advance of more than 1%.
Memory chips and advanced packaging sectors demonstrated the strongest explosive momentum. Flash memory giant Kioxia soared 10.43% in a single day, while semiconductor packaging substrate leader Ibiden surged 6.88%. Multilayer ceramic capacitor duo Taiyo Yuden and Murata Manufacturing rose strongly by 7.84% and 5.12% respectively; automotive chip giant Renesas Electronics jumped 6.29%, and chip designer Socionext also recorded a gain of 4.59%.
Semiconductor equipment and upstream materials supply chains strengthened in tandem. Silicon wafer giant Sumco rose 5.46% in a single day, chip dicing equipment monopoly Disco surged 5.14%, and Japan's largest semiconductor equipment giant Tokyo Electron gained 4.71%. Additionally, upstream electronic materials supplier Mitsui Mining recorded a substantial gain of 4.48%.
AI Trading Sentiment Recovers, Institutions Bullish on Repair Potential
Before SK hynix's earnings release, market AI sentiment had already begun recovering this week. U.S. chip stocks had previously undergone a clear correction over the past three to four months, but rebounded on Monday. The Philadelphia Semiconductor Index rose 3.6% in a single day on Tuesday, driving the Nasdaq Composite up 1.2%.
Morgan Stanley Chief U.S. Equity Strategist Mike Wilson said the recent rebound in tech stocks signals that the correction is nearing its end. He stated:
Most of the correction is over, we have been in a correction state for four to five months... I think the market has digested all of this very efficiently.
JonesTrading Institutional Services Chief Market Strategist Michael O'Rourke also noted in a report:
A wave of AI news triggered a relief rally after three weeks of pressure, with related news providing investors comfort—major AI companies can and are continuing to advance spending, even as smaller enterprises face pressure.
The market will successively receive quarterly earnings from Alphabet, Microsoft, and Amazon this week, with AI capital expenditure prospects facing direct scrutiny.
RBNZ Unexpectedly Holds Steady, NZD Under Pressure
The Reserve Bank of New Zealand on Wednesday decided by a 4:3 vote to keep the official cash rate unchanged, below market consensus expectations of a 25 basis point hike.
Following the announcement, the New Zealand dollar fell more than 1% against the U.S. dollar, with the NZD at one point dropping nearly 2% against the Australian dollar, marking its largest single-day decline since 2017. Two-year New Zealand government bond yields fell 12 basis points intraday.
According to meeting minutes, four members (Anna Breman, Carl Hansen, Prasanna Gai, Rebecca Williams) voted to hold steady, while three members (Paul Conway, Hayley Gourley, Karen Silk) voted in favor of a rate hike.
The statement showed that the committee unanimously agreed that further monetary tightening may still be necessary in the future, but the specific pace depends on the economic outlook; persistently high refined oil prices and currency depreciation could bring greater second-round inflation effect risks.
Australia's third-quarter CPI data came in above expectations, pushing the Australian dollar's intraday gain to as much as 0.3%, quoted at approximately 0.7045 U.S. dollars.
RBA Governor Bullock said in a speech that inflation may remain elevated for some time, with global energy prices far above the August baseline forecast levels, and upside price risks are gradually materializing. She stated the central bank "cannot tolerate high inflation persisting," and the monetary policy committee will discuss whether the tightening to date has been sufficient.
RBA Deputy Governor Hauser added that third-quarter CPI data was stronger than the August outlook, with inflation data "too high," and anticipated that Australia would not experience a recession.
In commodities, Brent crude rebounded sharply by 1.6% from the previous two consecutive days of declines, rising to approximately $111.17 per barrel.
Gold edged down 0.35%, with spot gold quoted at approximately $4,045 per ounce.
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