Asia markets slip despite Kospi’s historic surge

May 05, 2026 (MLN): Asian markets presented a mixed picture, as South Korea’s benchmark KOSPI Index capped off a historic rally even as broader regional sentiment weakened amid surging oil prices and rising geopolitical tensions in the Middle East.

The Kospi recorded its strongest monthly performance since the aftermath of the Asian Financial Crisis, soaring nearly 31% during the month.

The rally was largely fueled by a powerful surge in technology stocks, as investor enthusiasm around artificial intelligence continued to drive capital into semiconductor plays, according to CNBC.

Market heavyweights SK Hynix and Samsung Electronics led the charge, delivering monthly gains of around 60% and 35%, respectively, underscoring the dominance of chipmakers in the ongoing AI-driven market expansion.

Adding to the positive sentiment, HSBC recently upgraded South Korean equities to “neutral” from “underweight,” noting that prior foreign investor outflows had eased overcrowded positioning and reduced vulnerability to external shocks.

The bank also highlighted that beyond semiconductors, sectors such as energy storage, shipbuilding, defense, and nuclear power are increasingly contributing to the market’s upward momentum.

Despite the strong monthly showing, regional markets turned cautious on Thursday. The Kospi slipped 1.38% to close at 6,598.8, while the tech-heavy KOSDAQ Index dropped 2.29% to 1,192.35.

Elsewhere, Australia’s S&P/ASX 200 edged down 0.24% to 8,665.8. Japanese equities also declined as trading resumed following a holiday, with the Nikkei 225 falling 1.06% to 59,284.92 and the TOPIX losing 1.19% to 3,727.21.

In Greater China, Hong Kong’s Hang Seng Index dropped 1.27% in late trading, while mainland China’s CSI 300 ended the session largely unchanged at 4,807.30.

Investor sentiment was weighed down by a sharp rise in oil prices, triggered by escalating geopolitical risks.

Reports indicated that the United States Central Command is preparing potential military response options related to Iran, with Donald Trump reportedly maintaining a firm stance on keeping restrictions around the strategically critical Strait of Hormuz.

As a result, Brent Crude surged 3.4% to $121.98 per barrel, marking its highest level since mid-2022, while West Texas Intermediate rose 1.21% to $108.22.

Supply concerns stemming from Middle East tensions have been a key driver behind the rally in crude prices.

In the United States, futures markets showed a mixed trend. Futures tied to the S&P 500 and Nasdaq 100 posted modest gains, while Dow Jones Industrial Average futures edged lower.

Overnight, Wall Street ended on a subdued note. The Dow Jones Industrial Average declined 0.57%, marking its fifth consecutive day of losses.

 Meanwhile, the S&P 500 remained nearly flat, and the Nasdaq Composite managed a marginal gain, reflecting continued resilience in technology shares despite broader market uncertainty.

Overall, while South Korea’s AI-driven rally has stood out as a regional bright spot, escalating geopolitical risks and rising energy prices continue to inject volatility into global financial markets.

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