Asian Markets Surge, South Korea's Kospi Halts Trading Amidst Demand

Asian stock markets experienced a significant upswing on Tuesday, driven by renewed investor optimism and a decline in oil prices, which eased inflation concerns. South Korea's Kospi index led the gains, soaring by 3.8%, prompting a temporary halt in trading due to excessive demand. Japan's Nikkei index climbed 2.5%, surpassing 60,000 points, while Hong Kong's Hang Seng added 0.29%, and Shanghai saw a modest 0.1% increase.

In China, surprisingly strong trade data for October showed imports jumping 41.6% and exports rising 35.2%, both exceeding analyst expectations. However, this surge in imports led to a sharp contraction in China's trade surplus to $105.3 billion, the lowest since April. Year-to-date, China's trade surplus has exceeded $1 trillion, amidst calls from trading partners for Beijing to boost domestic demand.

U.S. stock futures showed mixed signals, with Dow Jones and S&P 500 futures edging up slightly, while Nasdaq futures dipped. This followed a strong recovery on Wall Street the previous day, where the S&P 500 and Nasdaq posted their best gains since April, recovering from a significant Thursday sell-off. The sell-off was attributed to concerns that a Democratic victory in the mid-term elections might lead to stricter AI regulation. The SOXX semiconductor ETF surged 7.5%, with most chip stocks recovering, except for Nvidia, which fell over 4% due to an investigation into its CEO's alleged relationship with a Chinese spy.

Oil prices continued their decline, with WTI crude down 1.14% and Brent crude down 0.95%. The drop is attributed to growing optimism about diplomatic efforts to end the U.S.-Iran conflict and President Trump's indication of avoiding extensive strikes against Iran. Analysts suggest that geopolitical expectations and weakening physical demand are contributing factors, with some cautioning that the downside potential for oil prices may be limited without a concrete agreement.

In Tel Aviv, dual-listed stocks were expected to open with a slight positive arbitrage gap of around 0.4% for the TA 35 index. Chip stocks that underperformed last week, such as Tower Semiconductor, Camtek, and Nova, were showing positive returns in pre-market trading. Palo Alto Networks and Ormat Technologies were also expected to support the index, while Teva and Nice showed minor negative gaps.