A powerful and dramatic divergence has split the Asian markets, as a record-setting, tech-fueled rally in South Korea stands in stark and dramatic contrast to a sharp retreat in Japan, a move triggered by a geopolitical shockwave that has rippled through the global chip sector.
This tale of two markets, one soaring to new heights and the other stumbling, is unfolding against a backdrop of tentative relief as Wall Street rebounds from a brutal, trade-war-induced selloff.
A record-setting day in Seoul
The undisputed star of the session is South Korea, where the benchmark Kospi index has added 1.01 percent to hit an all-time high of 3,646.67.
The rally is a powerful display of the market’s conviction in the country’s technology and industrial titans.
Shares of LG Energy Solution soared over 7 percent after the battery maker projected a 34 percent surge in its third-quarter operating profit, a boom driven by strong US demand for electric vehicles.
At the same time, the heavyweight Samsung Electronics advanced 2.47 percent after it projected a 32 percent rise in its own third-quarter profit, decisively beating analysts’ estimates.
A geopolitical shockwave hits the chip sector
While Seoul celebrates, a very different story is playing out in Tokyo and Shanghai. Japan’s Nikkei 225 has declined 1.34 percent, a slide led by a more than 5 percent plunge in the tech-investment giant SoftBank.
The sell-off was triggered by a report in The Information that its key subsidiary, the British chip designer Arm, was working with OpenAI on its major new partnership with Broadcom, a development that has sent a shiver of uncertainty through the market.
This was compounded by an even more dramatic geopolitical move. Shares of the Shanghai-listed chipmaker Wingtech plunged 10 percent, hitting their daily limit for a second straight session, after the Dutch government announced it had taken control of its Netherlands-based subsidiary, Nexperia.
The move is a significant escalation in the global tech war, a clear sign that Western governments are prepared to take extraordinary measures to secure their technological supply chains.
A cautious pause on Dalal Street
This complex and conflicting global picture is translating into a cautious and muted mood on Dalal Street.
After ending the previous session in the red, the Indian stock market benchmark indices Sensex and Nifty are poised for a flat open on Tuesday.
The trends on the Gift Nifty indicated a flattish start, trading around the 25,319 level, a sign that investors are taking a wait-and-see approach.
On Monday, the Sensex had declined 0.21 percent and the Nifty had fallen 0.23 percent, setting a cautious tone for the start of the new session.
This regional drama is taking place as a fragile sense of calm returns to the broader global market, after President Donald Trump appeared to soften his hardline stance on China over the weekend.
Following a weekend of escalating threats, the president posted on Truth Social, “Don’t worry about China, it will all be fine!”, a comment that was enough to spark a powerful rebound on Wall Street.
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