Asian Emerging Markets Rise on AI Chip Rally

South Korea’s KOSPI jumped 4.6% to its highest close since July 23, while Taiwan’s benchmark rose 1.7% to its best finish since June 22. The MSCI emerging markets Asia equities index, dominated by those two markets, rose as much as 2.1% to its strongest level since June 30.

Chipmakers led the advance. SK Hynix surged 8.3% and Samsung Electronics gained 5.7%, both to their highest closes in more than a month, while Taiwan Semiconductor Manufacturing Co. added 2.1%. Traders pointed to the latest OpenAI model release and the knock-on move in the U.S. Philadelphia SE Semiconductor Index on Friday as a catalyst for the regional bid.

“That carried directly into Seoul and Taipei this morning,” said Inki Cho, senior financial market strategist at Exness, noting that foreign and institutional investors were net buyers.

The rally also shows how concentrated the current emerging-markets momentum is: AI-linked exporters are benefiting from a global risk-on wave, while broader macro pressure is still hitting weaker currencies. The Philippine peso dropped to 62.763 per dollar, its lowest on record, as oil prices climbed on the Middle East war and pushed up the country’s import bill.

“Rising oil prices are increasing the Philippines’ import bill and demand for dollars, while renewed Federal Reserve rate-hike expectations are supporting U.S. yields,” said Glenn Yin, director of research at ACCM.

That Fed backdrop matters because higher U.S. rates usually lift the dollar, raise borrowing costs and pull capital out of riskier markets. The dollar was little changed after Friday’s U.S. payrolls data, but markets are now focused on upcoming U.S. inflation readings, which could determine whether the Fed hikes again or holds rates next week.

Elsewhere in emerging Asia, Thailand’s SET gained as much as 1.5% after inflation rose 2.53% in August from a year earlier, while Malaysia edged up 0.3%, Singapore slipped 0.6%, and the rupiah and ringgit weakened modestly. Taiwan’s dollar rose as much as 0.4% to 31.5 per dollar, its strongest since June 5, helping lift the MSCI gauge of emerging-market currencies.

Investors will be watching U.S. inflation data and any fresh AI-related catalyst for whether Monday’s semiconductor rally can extend, or whether rising energy prices and Fed uncertainty keep pressure on the more vulnerable parts of emerging Asia.