North Asia outperforms Southeast Asia
- Taiwan and South Korea stocks kept pulling ahead in late April as investors crowded into Taiwan Semiconductor Manufacturing Co. and SK Hynix, while ASEAN markets lagged. - Taiwan’s Taiex rose almost 10% since the Iran conflict began, while South Korea’s Kospi gained about 4%; India’s Nifty 50 fell roughly 5%. - Higher oil and shipping costs are hitting importers harder as AI money chases chipmakers. (adb.org)
Asian equities are splitting into two trades: chip-heavy North Asia is rising, while much of South and Southeast Asia is falling. (bloomberg.com) (adb.org) In Taiwan and South Korea, investors have kept buying companies tied to artificial intelligence servers, memory chips and foundry capacity, including Taiwan Semiconductor Manufacturing Co. and SK Hynix. Bloomberg reported Taiwan’s Taiex was up almost 10% since the Iran conflict began, and South Korea’s Kospi had gained about 4%. (bloomberg.com) In India, Indonesia and the Philippines, higher oil prices have strained trade balances and pushed equities lower, while the MSCI ASEAN Index was down about 7% in the same stretch. Those markets have more banks, industrials and consumer names, and fewer global chip suppliers for investors to hide in. (bloomberg.com) The split has widened because the same Middle East shock is hitting Asia unevenly. Oil-importing economies in South and Southeast Asia are more exposed to fuel costs, shipping disruptions and inflation than export markets built around semiconductors. (adb.org 1) (adb.org 2) The Asian Development Bank said on April 10 that growth in developing Asia and the Pacific is expected to slow to 5.1% in 2026 and 2027, from 5.4% in 2025, with the Middle East conflict lifting inflation and financial volatility risks. Its economists said more persistent disruptions could hurt activity through energy prices, transport networks and tighter financial conditions. (adb.org 1) (adb.org 2) North Asia has also had fresh earnings fuel. SK Hynix reported first-quarter operating profit jumped 406% to a record as demand for high-bandwidth memory used in artificial intelligence systems stayed strong. (straitstimes.com) That helps explain why global money managers are treating the region less as one Asia trade and more as two baskets. One basket offers direct exposure to AI hardware demand; the other is being judged on oil sensitivity, shipping costs and domestic demand. (bloomberg.com) (adb.org) The result is a higher bar for Southeast Asian markets just as chip names keep absorbing attention. As long as oil stays elevated and AI spending keeps lifting semiconductor earnings, that gap can stay open. (bloomberg.com) (adb.org)
