South Korea’s Kospi rose more than 6% after chipmaker SK Hynix reported a more than sevenfold increase in quarterly operating profit and announced plans to return about $75 billion to shareholders. The broader MSCI index of Asia-Pacific shares outside Japan gained 1.7%, Japan’s Nikkei added 1.1%, and China’s CSI300 rose 0.7%, according to Reuters. Investors were positioning ahead of results from Alphabet and Microsoft, seeking evidence that heavy investment in AI infrastructure is generating sufficient returns.
The rally was not without reservations. Technology companies have committed substantial capital to chips, data centres and computing capacity, but investors are increasingly distinguishing between expected demand and demonstrated profitability. Strong earnings from suppliers can support sentiment, while questions about financing costs and future returns may leave companies with weaker balance sheets more exposed if expectations change.
Currency markets responded to a different signal. The Reserve Bank of New Zealand held its official cash rate at 2.75% in a narrow 4-3 vote, surprising markets that had expected an increase. The New Zealand dollar fell more than 1% to a session low of US$0.5583. The central bank said annual inflation had eased to 3.7% in the September quarter from 4.1% in June, but remained above its 1% to 3% target range.
The decision reflected uncertainty over how to balance persistent inflation pressures against a recovery that remains uneven. Higher fuel prices linked to global energy disruption have added to near-term costs, while the central bank said further tightening could be required depending on the outlook. A pause therefore did not signal that inflation risks had disappeared; it showed that policymakers were divided over the timing of the next move.
Elsewhere, stronger Australian inflation supported the Australian dollar, while rising oil prices renewed concerns about energy supply risks in the Middle East. Markets were also awaiting decisions from the US Federal Reserve and Bank of Canada. The next direction for regional assets will depend on technology earnings, central-bank guidance and evidence on inflation and energy costs.
