Adam Turnquist, Chief Technical Strategist at LPL Financial, described the recent rally in semiconductor stocks as a "reset phase" rather than a sign of weakening in the long-term AI investment trend. His comments came amid a mixed session across Asian markets on Wednesday, where gains in chipmaker shares propelled Japan and South Korea higher, while Hong Kong struggled due to underperforming major technology firms.
The Nikkei 225 closed up 1.93% at 67,510.9, and South Korea's KOSPI increased by 5.23% to 7,100.85 following a 5.2% jump in the US semiconductor stock index during the prior trading session. This bounce followed sharp declines fueled by concerns over valuations linked to artificial intelligence developments. Key semiconductor producers like Samsung and SK Hynix staged strong recoveries, helping the KOSPI avoid slipping into bear territory. Japanese technology companies, including Tokyo Electron and SoftBank, also saw share price increases as investors anticipated ongoing investments in AI and advanced chip manufacturing.
Meanwhile, the Shanghai Composite inched up 0.40% to 3,879.69, contrasting with Hong Kong's Hang Seng Index, which declined 0.62% to 24,977.28. The latter suffered mainly due to weak performances from tech giants Tencent, Xiaomi, and Meituan despite some sector-specific strength. Market attention remains focused on quarterly earnings reports from major tech companies like Alphabet and Tesla, which account for nearly 20% of the S&P 500's market capitalization. Positive earnings guidance could further bolster semiconductor stocks, while disappointing results might challenge the recent AI-related technology rally.
Investor interest in Asian tech stocks is also influenced by China's policy outlook, as hopes for easing regulations in the tech and semiconductor industries lend some support to Chinese equities. The market rebound in Japan and South Korea follows a series of losses in major indices over several days, with Tuesday's gains setting a positive tone: a 3% increase in the Nikkei and a 3.6% rise in the KOSPI. Wall Street's Nasdaq 100 also recorded its strongest day in three weeks, supported by a semiconductor sector rally.
