Most emerging Asian equity markets moved higher on Monday, with Taiwan and South Korea posting the largest gains as technology and artificial intelligence-linked stocks led the advance. The MSCI EM Asia index rose by more than 1.5% to reach a record high, a performance largely attributable to AI-focused names in South Korea and Taiwan, which account for roughly 60% of the gauge.
Taiwan and South Korea power regional rally
Taiwan’s benchmark climbed over 3% to a record 47,871.190 points, extending a run that put the market on track for a sixth straight session of gains. South Korea’s main index, the KOSPI, also advanced more than 2%, trading near the record high it set on Friday. Observers highlighted the outsized contribution of semiconductor and AI-related equities to the region’s strength.
"Today’s equity trading shows that AI remains the strongest counterweight to geopolitics and higher rates," said Glenn Yin, director of research at brokerage ACCM. "Korea and Taiwan are being treated as direct beneficiaries of the semiconductor and AI capex cycle, while Japan is getting an extra boost through large tech and AI-linked names."
The two markets have been central to the global AI investment theme, with investors placing growing emphasis on AI-related upside even as geopolitical concerns surrounding the Iran conflict and tensions in the Strait of Hormuz persist.
Geopolitical developments and currencies
Currency markets in Asia moved in the opposite direction, pressured by a firmer U.S. dollar and a degree of uncertainty surrounding progress in U.S.-Iran negotiations. Mediators said the U.S. and Iran agreed to a roadmap toward a final deal within 60 days, but the talks remained clouded by fresh developments, including Tehran’s assertion that it had again closed the Strait of Hormuz and U.S. President Donald Trump repeating threats to resume attacks on Iran.
That dynamic kept the MSCI EM currencies gauge under pressure, which fell 0.3% for a third straight session. Specific currency moves included the Indonesian rupiah weakening to 17,818 per dollar and the Indian rupee breaking a six-session winning streak by slipping to 94.405 per dollar. The South Korean won declined 0.5% to 1,538.8 per dollar, near a two-week low, while the Philippine peso dropped to its weakest level since June 12, marking a fifth consecutive session of depreciation.
Market watchers eye MSCI decision on Indonesia
Investors are also focused on an upcoming decision from MSCI regarding Indonesia’s classification in its emerging markets framework. The index provider is set to announce its ruling in the early Asian hours on Wednesday. Market participants told analysts the outcome could significantly influence capital flows: a downgrade would likely exacerbate outflows, reinforce risk aversion and increase downside pressure on both the country’s equities and currency, according to industry commentary cited in market coverage.
Company- and policy-level highlights
- SK Hynix surpassed Samsung Electronics to become South Korea’s most valuable company, a development noted among the day’s market highlights.
- Japan’s finance minister reiterated readiness to intervene in currency markets, saying authorities stand ready to act on the yen at any time.
- China maintained its lending benchmark Loan Prime Rates (LPRs) unchanged in June for the 13th consecutive month.
Those snapshots accompanied the broader market moves captured in Asia index and currency indicators around 0411 GMT, which showed mixed daily and year-to-date performance across major markets.
Implications for sectors
The equity gains centered on technology and semiconductor sectors, reflecting concentrated investor demand for firms tied to AI infrastructure and chip supply chains. Currency weakness principally impacted emerging market-sensitive sectors and domestic-focused industries in Indonesia, India, the Philippines and South Korea.
What to watch next
- MSC I’s decision on Indonesia’s market classification, due early Wednesday in Asia, which could influence capital flows into and out of the country.
- Further developments in U.S.-Iran talks and any additional moves or statements affecting the Strait of Hormuz, which have been weighing on investor confidence in regional currencies.