Asian markets closed mostly higher on Monday, helped by gains in segments ranging from consumer shares in China to financials and resources in Australia. However, investors continued to trim positions in high-flying semiconductor and artificial intelligence-related stocks as uncertainty over the path of U.S. interest rates lingered ahead of key events this week, including the nonfarm payrolls report and the annual central bank meeting in Sintra, Portugal.
The U.S. dollar was on track for its strongest month in nearly a year, a backdrop that weighed on rate-sensitive assets. Gold slipped to hover around $4,060 an ounce amid renewed concern over the durability of the U.S.-Iran ceasefire, while Brent crude futures held above $72 a barrel after stabilising from four-month lows as the U.S. and Iran agreed to halt attacks and to meet on Tuesday in Qatar’s capital to address the dispute over the Strait of Hormuz.
Key takeaways
- Asian equities finished mostly higher, with gains in China and Japan offset by declines in parts of the semiconductor complex.
- Rate expectations remained a headwind, prompting profit-taking in AI and chip-related names.
- Dollar strength and a cautious commodities tone shaped broader sentiment, with gold easing and oil recovering on ceasefire and negotiations.
- Policy and market-structure news drove divergence across stock markets, including moves tied to options trading and corporate lobbying related to DRAM.
What drove the move
Participants across the region approached Monday with two competing forces: broad risk appetite in parts of equity markets, and selective de-risking in technology exposure. The pullback in AI- and semiconductor-linked stocks reflected concern that U.S. borrowing costs could stay higher for longer, particularly after the dollar strengthened and investors positioned ahead of U.S. employment data and central bank discussions.
In Japan, sentiment improved after data showed Japanese consumers spent more than expected in May. Japanese chip-related stocks also pared earlier losses, helping the Nikkei rebound modestly. The move came despite ongoing global pressure in select semiconductor names as investors looked for clarity on policy and volatility.
Market reaction across Asia
China’s Shanghai Composite rose 1.16% to 4,073.90, led by gains in consumer and healthcare companies. The shift suggested that money flowed into defensives and domestic demand-linked areas rather than concentrating only on AI and memory themes.
In Hong Kong, the Hang Seng jumped 1.57% to 23,026.68 after reports indicated that Apple is lobbying the U.S. government for approval to buy DRAM chips from Chinese memory manufacturer CXMT. The development added a potential pathway for sourcing flexibility—an issue that investors have increasingly treated as material for memory supply chains.
Japan’s Nikkei closed 0.15% higher at 69,468.11 as chip-related stocks trimmed earlier declines. The broader Topix index rose 0.47% to 3,982. Market strength was also supported by regional semiconductor investment news: South Korea announced a $576 billion semiconductor and AI investment plan backed by Samsung and SK Hynix, aimed at reinforcing global chip leadership.
Still, not all chip exposure was treated equally. SoftBank Group shares dropped 5.3% on news of a potential delay in OpenAI’s IPO, weighing on broader sentiment around AI investment timelines. Kioxia Holdings fell by more than 4%, and Advantest was down 1.5%, while Tokyo Electron advanced 2.4%.
In South Korea, stocks ended slightly lower. The Kospi fell 0.20% to 8,394.65 after trading earlier as low as 8,127.99, with technology stocks dragging performance. Samsung Electronics dropped 4.8% and SK Hynix slipped 1.7% after the Financial Supervisory Service indefinitely postponed the launch of weekly options for blue-chip stocks, citing extreme volatility. Investors appeared to interpret the delay as an additional constraint on how derivatives tied to large-cap companies could trade.
Batteries were a notable bright spot. LG Energy Solution surged 20.8% and Samsung SDI climbed 12.5%, indicating that capital was being reallocated toward subsectors perceived as benefiting from different demand or policy dynamics than semiconductors and AI infrastructure.
Australia, New Zealand and commodities
Australia stood out for strength. The S&P/ASX 200 rose 0.68% to 8,823.40, supported by gains across banking, technology and resource stocks, while the All Ordinaries index climbed 0.70% to 9,026.90. New Zealand’s benchmark S&P/NZX-50 also rose 0.37% to 13,545.56 after reversing early losses.
In commodities, oil and gold reflected the interplay between geopolitical risk and macro expectations. Brent crude futures stayed above $72 a barrel after the U.S. and Iran agreed to stop attacking each other and planned talks in Qatar regarding the Strait of Hormuz. Gold edged lower, trading around $4,060 an ounce, as uncertainty persisted over the ceasefire’s stability.
What to watch next
Focus will likely shift quickly to the U.S. employment report and the central bankers’ gathering in Sintra, given their potential to shape expectations for interest rates. Investors will also be looking for follow-through on U.S.-Iran negotiations in Qatar, which could further influence energy prices and risk sentiment. On the equity side, ongoing developments tied to AI financing timelines and semiconductor market structure—along with any further signs of volatility in derivatives—may determine whether semiconductor weakness deepens or stabilises as the week progresses.
