Asian Equities Climb as Chipmakers Rally, While Oil and Fed Bets Loom

Asian equities advanced on Monday, with a strong rebound among chipmakers leading the way as fresh enthusiasm over artificial intelligence buoyed technology stocks. At the same time, elevated crude prices and U.S. jobs data that came in hotter than expected kept worries about further interest-rate increases on the table.

Monday's advance came after a mixed trading day on Wall Street on Friday, during which the majority of U.S. shares declined following an August payrolls report that showed an increase of 162,000 jobs, exceeding projections and reinforcing arguments for a more hawkish Federal Reserve.

U.S. markets will be shut on Monday in observance of the Labor Day holiday, and stock-index futures are operating on a holiday timetable, resulting in reduced liquidity. During Asian trading hours, futures tied to the Nasdaq 100 and the S&P 500 were barely moved.

While the jobs figures offered a favorable signal for the global growth picture, they simultaneously narrowed the Federal Reserve's flexibility to loosen monetary policy, drawing attention to the upcoming U.S. consumer price report on Friday. That inflation reading could be pivotal for the September rate call, even as persistently high Treasury yields maintain restrictive financial conditions.

Chipmakers Rally as AI Optimism Boosts Supply Chain

The MSCI Asia Pacific index advanced by 1.1%, and the broader gauge that excludes Japan climbed approximately 0.9%. In South Korea, the KOSPI surged 3.4%, while Japan's Nikkei 225 added 1.9%.

South Korea spearheaded the advance, with SK Hynix up 6.1% and Samsung Electronics higher by 4%. The upswing came after U.S. semiconductor names strengthened following OpenAI's launch of GPT-6 Astra, reigniting confidence in demand for AI-related infrastructure.

Japan's Kioxia soared 7.6%, while TDK gained 2.5% and Murata Manufacturing climbed 4.3%. Taiwan Semiconductor Manufacturing rose 1.5%, LG Innotek advanced 4.5%, and Luxshare Precision increased 2.6%. In contrast, Largan defied the positive trend with a 9.5% drop, and Sony edged down 2.6%.

Foxconn remained stable even after projecting that its third-quarter operations would beat market forecasts, underpinned by robust AI demand and peak-season sales in information and communications technology. August revenue skyrocketed 52% from a year earlier to an unprecedented T$921.8 billion, marking the second consecutive month above the T$900 billion threshold.

In other developments, oil prices intensified inflationary worries after the United States hit three Iranian oil tankers over the weekend in response to Iranian attacks on U.S. Navy vessels.

Iran has issued a threat to create a restricted zone near the Strait of Hormuz, heightening the possibility of more interruptions to energy shipments. Brent crude ticked up 0.2% to $96.45 per barrel, while West Texas Intermediate crude added 0.4% to $91.85.

China and India Stocks Diverge as Policy Support Ramps Up

China's CSI 300 index inched up 0.2%, whereas Hong Kong's Hang Seng declined 1.2%.

Chinese tech stocks presented a mixed picture: Xiaomi dropped 3.9%, Baidu slid 5.6%, JD.com lost 1.5%, Meituan fell 1.9%, and Tencent eased 0.8%. On the upside, MiniMax climbed 4.9% and several hardware companies advanced.

Beijing additionally announced a wider 360 billion yuan recapitalization initiative for state-owned banks and insurers, which includes 300 billion yuan in special Treasury bonds, aimed at reinforcing the financial system and facilitating lending amid decelerating growth.

India's Nifty 50 edged up 0.1%, and GIFT Nifty futures suggested a slightly positive opening following four consecutive weeks of losses. Market participants are also monitoring revised pre-open session regulations, which align the process more closely with the closing auction session and have led to pronounced volatility around the Sensex's close.

In other regional markets, Australia's S&P/ASX 200 advanced 0.11%, Singapore's Straits Times declined 0.2%, Thailand's SET gained 1.1%, the Philippines' PSEi slipped 0.31%, Malaysia's KLCI moved up 0.32%, New Zealand's NZX 50 fell 0.5%, and Japan's TOPIX rose 0.6%.