MSCI Asia-Pacific Index surges 2.79%, with technology stocks rising across the board

Southern Finance, 21st Century Business Herald Reporter Hu Huiyin

Due to overnight U.S. manufacturing data rising and other factors, Asia-Pacific stock markets rebounded significantly.

On February 3, South Korea’s KOSPI index halted its decline and led the Asia-Pacific markets, closing up 6.84% or 338.41 points at 5,288.08. Chip manufacturers Samsung Electronics and SK Hynix were the biggest drivers. Samsung’s stock price surged up to 10% intraday, marking the largest single-day gain since March 2020. The Nikkei 225 index rose 3.92% to 54,720.66, hitting a new all-time high.

Other Asia-Pacific markets also rose. On the 3rd, Australia’s S&P/ASX 200 index closed up 0.89% at 8,857.1. In Southeast Asia, the FTSE Singapore Strait Index rose 1.06% to 4,944.09; Indonesia’s Composite Index increased 2.52% to 8,122.6; Vietnam’s Ho Chi Minh Index gained 0.33% to 1,812.47; the Philippines’ Manila Index rose 1.67% to 6,401.96; Thailand’s SET Index increased 1.11% to 1,336.11; and Malaysia’s FTSE Malaysia KLCI rose 0.42% to 1,748.26.

After “Black Monday,” Asia-Pacific stocks collectively rebounded. What will the future hold?

Asia-Pacific Stocks Rebound Collectively

On February 3, Asia-Pacific stock markets rebounded strongly, with the MSCI Asia-Pacific Index up 2.79%, marking the largest single-day gain since April, with technology stocks leading the rally.

Li Huihui, a management practice professor at Lyon Business School, told 21st Century Business Herald that the rebound on the 3rd was essentially a reflection of emotional recovery and liquidity returning to normal. The previous day’s decline was characterized by deleveraging: sharp fluctuations in precious metals triggered chain reactions in margin calls and risk control mechanisms, leading funds to sell off highly liquid index components and industry leaders; only when gold and silver prices stabilized and the dollar and interest rate volatility narrowed did market funds re-enter.

On the news front, CCTV reported that on February 2, U.S. President Trump posted on social media platform “Truth Social” that the so-called “reciprocal tariffs” on Indian goods would be reduced from 25% to 18%, effective immediately.

“U.S. reduction of the so-called ‘reciprocal tariffs’ on India was an important catalyst for this market volatility, but not the core driver,” Li Huihui said. “The market’s general consensus on liquidity recovery is the real driving force behind this Asia-Pacific stock rebound.”

Additionally, Yang Xite, an assistant researcher at Anbang Think Tank, told 21st Century Business Herald that several factors contributed to this rebound: “First, precious metals prices surged significantly, with gold and silver rising nearly 4% and over 6%, stabilizing market sentiment. Second, the AI investment boom reignited, especially in the semiconductor sector, with chip stocks like Samsung Electronics and SK Hynix soaring, boosting risk appetite. Third, unexpectedly strong U.S. manufacturing PMI and other data increased confidence in a soft landing for the economy, while market bets on the Federal Reserve’s policy shift intensified. If Waller becomes Fed Chair, his stance on ‘cutting rates and shrinking balance sheet simultaneously’ could support dollar liquidity in the short term and ease pressure on emerging markets.”

Japan and South Korea Markets Warm Up

After a sharp sell-off on Monday, South Korea’s stock market rebounded strongly. Analysts say domestic institutions were the main drivers of the Seoul market’s rebound on the 3rd, with foreign investors also net buying, while retail investors sold off.

Meanwhile, the country’s tech stocks also recovered due to easing concerns over global AI spending. By the close, chipmakers Samsung Electronics and SK Hynix rose 11.37% and 9.28%, respectively.

Yang Xite analyzed that South Korea’s strong rebound was mainly due to two reasons: first, the surge in storage chip demand driven by AI, leading Samsung Electronics and SK Hynix to lead the rally, with this super cycle expected to continue; second, a technical rebound after the previous day’s large sell-off, combined with geopolitical factors and moderate inflation data, jointly supported the market recovery.

Li Huihui said that the strength of this rebound was largely due to South Korea’s “double leverage” characteristic: “On one hand, financial leverage, as semiconductor companies’ operations are highly sensitive to interest rate changes; on the other hand, foreign capital leverage, since South Korea is one of the easiest channels for foreign capital to enter and exit Asia, and foreign flows have a significant impact. Because of this, yesterday’s risk-averse foreign outflows quickly reversed on the 3rd to avoid missing the rally, becoming an important force in driving the rebound.” He expects the development cycle of AI hardware industry is not over, and the previous irrational market decline created opportunities for value investing.

The Nikkei 225 index also surged significantly, reaching its largest intraday gain since January 13. Analysts say this rebound was driven by strong earnings reports from banks and tech stocks, along with increased risk appetite.

Yang Xite pointed out that the rise in the Nikkei was mainly because the previously plunging precious metals market stabilized, restoring investor confidence, and overnight European and U.S. markets, especially strong U.S. manufacturing data, created a positive atmosphere. Additionally, the AI investment boom boosted chip stocks like Advantest and Tokyo Electron, which surged and pushed the index higher.

Indonesia Leads Southeast Asia

On the 3rd, Indonesia’s Composite Index rebounded strongly after a previous day of sharp decline, leading Southeast Asian markets, with gains in sectors like finance, infrastructure, and agriculture.

Besides Indonesia, other Southeast Asian markets also rose, with Singapore and the Philippines both gaining over 1%.

Yang Xite analyzed that most Southeast Asian markets rose today mainly due to the rebound in precious metals prices and the rekindling of AI investment themes, which boosted risk appetite. Indonesia, Vietnam, and other markets also strengthened due to local economic stabilization and expectations of foreign capital inflows. Additionally, global investments in AI infrastructure, benefiting from Southeast Asia’s energy and labor advantages, will continue to attract funds. As global capital seeks supply chain resilience and diversification, the region is seen as an AI industry “backyard,” with geopolitical premiums supporting market performance.

Li Huihui also believes that the support for Southeast Asian markets does not stem from a short-term significant improvement in their economies. The core reason is that global liquidity conditions still favor a loose monetary policy stance by the Federal Reserve. Earlier concerns about tightening liquidity were a false alarm; once those fears dissipated, funds dared to reallocate to high-growth potential regions like Southeast Asia. “This rise in Southeast Asian markets is essentially a valuation recovery driven by emotional repair.”