South Korea’s Kospi index jumped nearly 18% on Friday, leading a sharp rebound across Asian markets as artificial intelligence stocks recovered from earlier losses. The dramatic rally followed strong quarterly earnings from Microsoft and a suspected coordinated currency intervention by U.S. and Japanese regulators to stabilize the yen.
Global financial markets experienced a violent swing this week, culminating in a powerful rebound across Asian exchanges driven by renewed investor appetite for technology and artificial intelligence equities. South Korea’s benchmark Kospi index jumped 17.9% to 6,695.45 on Friday, marking its largest single-day gain ever, according to apnews.com. The previous largest single day gain of nearly 12% occurred in October 2008 during the global financial crisis.
The surge offered immediate relief after a brutal three-day sell-off that had knocked the Kospi down more than 17%. Investors had fled technology shares amid mounting anxieties over a potential artificial intelligence bubble and intensifying competition from chipmaking rivals in China.
Microsoft Earnings and the Tech Sector Rebound
Market sentiment shifted dramatically following Microsoft’s report of stronger-than-expected profits for the last quarter. Microsoft shares soared 15.5% in what marked the company’s best day in nearly 18 years. Traders interpreted the robust figures as a signal that massive capital expenditures directed toward artificial intelligence infrastructure are successfully converting into actual corporate profits.
That sudden reversal played out intensely in Seoul. Shares of South Korean technology giant Samsung Electronics surged 28%, while memory chipmaker SK Hynix soared 30%, according to apnews.com. Despite Friday’s extraordinary gains, the Kospi remains well below its peak of over 9,000 reached in June.
Currency Intervention Stabilizes the Japanese Yen
Outside the equity markets, foreign exchange desks monitored a sharp drop in the value of the U.S. dollar against the Japanese yen. Authorities in Japan and the United States were suspected of executing a coordinated intervention after the exchange rate hovered above 160 yen, near 40-year highs.
According to reports from the Nikkei financial newspaper, the Federal Reserve Bank of New York conducted a rate check by asking various commercial banks to provide exchange-rate quotes for currency trades. Officials from the U.S. Treasury Department and Japanese Finance Minister Satsuki Katayama declined to comment on the operation.
The intervention coincided with the Bank of Japan’s decision to leave interest rates unchanged at the conclusion of its policymaking meeting. Analysts noted that the timing was likely designed to pre-empt speculative market volatility linked to central bank policy announcements.
Commodities and Regional Markets React
Oil prices moved lower as international markets processed potential shifts in crude supplies.
Across other Asian bourses, trading results were mixed. Taiwan’s Taiex surged 8%, propelled by a 10% jump for chipmaker TSMC. Tokyo’s Nikkei 225 climbed 4% to 64,362.02, aided by a 14.2% jump in SoftBank Group shares. Meanwhile, Hong Kong’s Hang Seng slipped 0.3%, and the Shanghai Composite advanced 0.9% following official data indicating that China’s factory activity slowed in July for the first contraction in five months.
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