Mixed Asian Markets See Chip Stocks Rally Amid Rising Oil Prices and Inflation Data

Asian stock markets showed a mixed performance following a mixed session on Wall Street, where the Dow Jones fell 1.1%, the S&P 500 dropped 0.3%, and the Nasdaq rose 0.2%. The backdrop includes a renewed U.S. military strike on Iran, which retaliated by attacking U.S. bases in Kuwait and Bahrain. Oil prices continued their upward trend after a more than 6% jump the previous day, with Brent crude rising 1.2% to $79 per barrel and WTI also up 1.2% to $74.4 per barrel.

In Asia, the Nikkei index climbed 2%, led by strong gains in semiconductor stocks such as Kioxia (+8.3%), Advantest (+7.6%), Tokyo Electron (+5.8%), Renesas (+5.5%), and Dai Nippon Screen (+5%). South Korea’s Kospi index, which entered bear market territory yesterday after falling 20% from its recent peak, edged up 0.7%, driven by chipmakers Hanmi Semicon (+7.7%) and SK Hynix (+5.4%). In Hong Kong, the Chinese chipmaker SMIC surged 8%, topping the Hang Seng index, while Lenovo also rose 6.8%.

China’s inflation data for June showed a 0.3% monthly decline in the Consumer Price Index (CPI), slightly worse than the expected 0.2% drop, following a 0.1% decline in May. The annual inflation rate slowed to 1.1% from 1.2% in May, matching forecasts. Core inflation, excluding food and energy, rose 1%, down from 1.2% in May. Food prices fell 1.6% year-on-year, continuing a downward trend. Meanwhile, the Producer Price Index (PPI) increased 4.1% annually, the highest rise since July 2022, consistent with expectations, though it declined 0.3% on a monthly basis.

The mixed market trends reflect ongoing geopolitical tensions, rising energy costs, and nuanced inflation signals from China, with semiconductor stocks notably outperforming across key Asian markets.