AI Optimism Lifts Emerging-Market Stocks; Kospi Jumps More Than 3%

Expectations for a new artificial intelligence model drove gains in technology shares, including chipmakers, lifting emerging-market stocks. Strength in tech supported investor sentiment despite rising oil prices and renewed concerns about US interest-rate hikes.

According to Bloomberg data on September 7, the MSCI Emerging Markets Index rose as much as 1.4% intraday, reaching its highest level since June 26. South Korea’s Kospi also jumped more than 3%. An index of emerging-market currencies added 0.1%, marking gains in 12 of the past 13 trading sessions.

Technology stocks led the advance. A September 4 rally in US semiconductor shares carried into Asian markets after OpenAI unveiled GPT-6, its next-generation AI model that it described as a key milestone in the development of artificial general intelligence, or AGI. Buying centered on technology names in major markets including South Korea, Taiwan and Japan.

Many sectors outside technology were weaker. International oil prices rose after the US and Iran exchanged attacks involving tankers in the Strait of Hormuz. Strong US employment data also increased the likelihood of an earlier Federal Reserve rate hike.

Kui Wei, BNY’s chief market strategist for Asia-Pacific, said gains in technology stocks offset the burden from surging oil prices. Friday’s sharp rally in tech shares lifted investor sentiment across Asian markets, particularly the Kospi, Taiwan’s stock market and the Nikkei, he added.

The won also strengthened. Backed by gains in semiconductor stocks and foreign inflows into the Kospi, the Korean currency rose to its highest level in about two years. By contrast, currencies in oil-import-dependent economies such as Indonesia and the Philippines weakened under pressure from higher crude prices.