As the situation in Iran unfolds and the momentum of rising oil prices recedes, coupled with strong economic data from the United States easing market concerns, the Asia-Pacific stock markets saw a strong rebound on Thursday (March 5). The US stock market closed higher on the 4th.
On Thursday, the Asia-Pacific stock markets cleared the gloom and rebounded after several days of sharp declines. The KOSPI index in South Korea surged by as much as 12% at one point during the day, marking the largest intraday gain since 2008, leading the exchange to activate the “Buy-side Sidecar” mechanism, pausing algorithmic trading for five minutes.
South Korean tech giants Samsung Electronics and SK Hynix both soared by over 13% to 15%.
Taiwan’s stock market also showed impressive performance. TSMC surged by NT$95 after the opening, setting a new record high for single-day gains at NT$1,960 per share, leading the market to almost recover the previous day’s losses.
The Nikkei 225 index in Japan also shrugged off the shadow of the previous day, closing with a rebound of over 4%. Takashi Ito, senior strategist at Nomura Securities, pointed out, “The strong expansion of US employment and the ISM non-manufacturing index confirms the resilience of the real economy, which has eased the stock market.”
The driving force behind the current global stock market rebound stems from the rise of the US stock market on Wednesday. The Dow Jones Industrial Average rose by 238 points, ending a three-day decline; the S&P 500 and Nasdaq rose by 0.78% and 1.29% respectively.
Data released by the Institute for Supply Management (ISM) on Wednesday showed that strong expansion in US service sector activities in February, with the ISM non-manufacturing index rising to 56.1, surpassing market expectations of 53.5, reaching a new high since July 2022, reflecting a rebound in demand and employment, supporting first-quarter economic growth.
Additionally, the US added 63,000 jobs in February, surpassing the market’s expectation of 50,000. These two strong economic data points indicate that the fundamentals of the US economy remain robust, further boosting investor confidence.
Moreover, stable energy prices have also improved investor sentiment.
US Treasury Secretary Scott Bessent stated that Washington will implement a series of measures to stabilize Gulf oil transportation.
Recently, US President Donald Trump announced that the US will provide risk insurance for all maritime trade through the Persian Gulf to encourage the passage of oil tankers through the Strait of Hormuz.
The rising trend in oil prices has slowed down. Brent crude oil futures and U.S. West Texas Intermediate crude futures showed a dampening trend on the 4th, with Brent crude oil holding steady at the close, and West Texas crude oil slightly rising by 0.13%.
With oil prices stabilizing, pressure has eased on countries like South Korea that rely on oil imports, subsequently reducing risk sentiment.
Despite signaling a market recovery, geopolitical tensions remain complex. President Trump expressed confidence in the military actions, and the US military also sank an Iranian warship in international waters.
There were reports circulating briefly in the market that Iran was willing to negotiate with the US, but Tehran promptly dismissed the reports as “purely fictional.”
As the conflict continues, safe-haven assets such as gold are maintaining high positions, with the spot gold price hovering around $5,150 per ounce.
Analysts believe that in the long term, artificial intelligence (AI) remains a solid driver for semiconductor stocks, which will continue to support the technology blue-chips in Japan, South Korea, and Taiwan.