Asian Markets Surge Led by Chipmakers Amid US Rebound and Rising Oil Prices
Asian Stock Markets React to Global Economic and Geopolitical Developments
By Gregor Stuart Hunter
Market Performance Across Asia
SINGAPORE, July 22 (Reuters) - Stocks jumped at the start of trading in Asia on Wednesday as investors took cues from a rebound in U.S. markets, shrugging off climbing oil prices as Houthi rebels threatened to open a front in the widening Middle East conflict.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.2% as South Korea's Kospi jumped more than 6%. Japan's Nikkei 225 gained 1.9%, while S&P 500 e-mini futures edged 0.1% lower.
Oil Prices and Geopolitical Tensions
Brent crude nudged 0.6% higher to $91.55 a barrel after two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday after threats of attack from Yemen's Iran-aligned Houthis.
Technology Sector Drives Gains
"Equity markets shrugged off geopolitical risks, focusing instead on tech sector returns," Westpac analysts wrote in a research report. "After large losses in recent days, semiconductor stocks bounced back."
Overnight, the S&P 500 was up 0.9%, snapping a three-day losing streak, driven by a rebound in semiconductor shares after data showed Korean semiconductor exports almost tripled during the first few weeks of July and a gauge of Taiwanese export orders for June topped estimates.
Key Earnings and Sector Focus
Upcoming Corporate Earnings
Market focus will turn to earnings from Alphabet, which is facing heightened investor scrutiny over the delayed launch of a model key to its AI ambitions, and Tesla, which is widely expected to report its first quarterly cash burn in over two years as its spending on AI and robotics soars.
Pharmaceutical Sector in the Spotlight
Pharmaceuticals will also be in focus after U.S. President Donald Trump said all generic drugs brought into the United States will carry a tariff of 0% for two years from August 1, after which the rate will rise to 100% for one year and 200% thereafter.
Currency, Bond, and Commodity Markets
Currency Movements
The U.S. dollar index, which measures the greenback's strength against six currencies, held near a one-week high of 101.20. Against the yen, the dollar was down 0.1% at 163.06 yen, weakening slightly after setting a four-decade high against the Japanese currency on Tuesday.
Bond Markets and Central Bank Outlook
The jump in oil prices, which settled at a five-week high on Tuesday, did little to unsettle bond and currency markets ahead of central bank meetings next week. Among them, the U.S. Federal Reserve is set to keep its key interest rate steady for the rest of 2026, according to the median forecast of economists in a Reuters poll, though they said the chance of a rate hike is high.
Interest Rate Expectations
Fed funds futures indicate that though one hike by December is probable, a hike of 50 basis points or more by the end of the year is a coin toss, the CME Group's FedWatch tool showed.
Commodities and Cryptocurrencies
The yield on the U.S. 10-year Treasury bond was up 0.2 basis point at 4.628%. Gold was up 0.5% at $4,097.67.
In cryptocurrencies, bitcoin was up 0.3% at $66,611.73, while ether climbed 0.7% to $1,936.18.
(Reporting by Gregor Stuart Hunter; Editing by Christopher Cushing)