HONG KONG – The pricing war in every semiconductor stock on the continent appeared on screens before lunch in Tokyo on Monday, and money that had spent a month hiding rushed back straight to the names it had abandoned.
SoftBank Group shares, the most widely used bet on artificial intelligence trading on any Asian stock exchange, jumped as much as 12 percent. Taiwan Semiconductor Manufacturing Co., the company that prints the chips on which those bets are based, rose 2.8 percent. The gains were huge. The reason was not. The war was ending.
Washington and Tehran confirmed over the weekend that they would stop the conflict that the United States and Israel were waging against Iran, and the wording of the agreement reached trading desks as more relief than news. Stocks in the Asia-Pacific region spent the back half of last week rising on signs that a deal is near. This confirmation turned this initial bounce into the broadest session of risk appetite the region has seen since the spring.
What moved wasn’t profits, nor guidance, nor any new fact about the companies themselves. It was the removal of the one variable that had hung over chip trading and artificial intelligence for weeks. The war has threatened the only thing capable of breaking the rally, an inflation-fueling oil shock, and its end took that threat off the table at the weekend.
The numbers were high. Japan’s Nikkei 225 rose 5.5 percent, South Korea’s Kospi rose 5.7 percent, Taiwan’s Taiex rose 2.7 percent, and Australia’s ASX 200 rose 1.5 percent. The most intense movements were clustered where the war had reached the deepest depths. Tokyo Electron, which makes the machines that make chips, rose more than 9 percent. Advantest stock rose nearly 8 percent. In Seoul, SK Hynix rose 6.4 percent and Samsung Electronics rose 4.7 percent, while in Taipei Hon Hai Precision, the Foxconn company that assembles many of the world’s devices, rose 2.7 percent. SoftBank was at the heart of the headwind just last week, when Iranian strikes sent Asian markets lower on four fronts.
The engine underneath it all was raw. Brent crude fell 4.5 percent to less than $83.40 per barrel, reducing the premium that fears of closing the Strait of Hormuz contributed to the price increase. Conditions explain the decline. Under the agreement, the strait will be reopened to free passage, the US naval blockade of Iranian ports will be lifted, sanctions on Iranian oil sales will be suspended, and nearly $24 billion in frozen Iranian assets will be released. Al Jazeera reported. Iran got the heart of the deal, and the oil market got its barrels back.
Low oil is the quiet hinge of the session. Fear of oil-driven inflation was the main force limiting the AI ​​trade that carried the Nasdaq to record levels earlier this month. Remove fear and lift the lid. US futures recorded this within minutes, with contracts on the S&P 500 index rising about 1 percent and the tech-heavy Nasdaq index rising about 1.8 percent before the New York open.
The reading on the desks was that the confirmation, not the deal itself, had done the work. Khun Goh, head of Asia research at ANZ, noted that markets had already moved late last week when Washington signaled a deal was close, and the actual confirmation only served to push the rally further. The most influential and best-selling names led the war precisely because the move was mechanical, a cover for positions taken against a war that was no longer coming.
For the AI ​​pool, the link is driven by cost. The construction that has defined the past two years—data centers, high-bandwidth memory, and networks—runs on cheap and predictable power, and the war on both sides of the world’s most important oil corridor is the opposite of predictable. SK Hynix and Samsung, suppliers of the memory that trains the biggest models, are as directly leveraged in this calculation as any names in the index, which is why the deal scheduled to be signed in a Swiss city on Friday made its debut in Seoul on Monday morning.
The pattern is familiar. In April, a clear signal that Iran might reopen the Strait of Hormuz was enough to send oil prices crashing and the Dow Jones rising in the afternoon. Monday was the same trading on a broader scale, with a final document behind it rather than a rumor.
None of this makes peace real yet. Iran’s Supreme National Security Council said that the drafting of the memorandum of understanding has been completed, but the memorandum is not a treaty, and it is not scheduled to be signed before a ceremony in Switzerland on Friday. Five days is a long time to reach a ceasefire aimed at stopping the fighting on all fronts, including Lebanon. The market knows that. Hong Kong’s Hang Seng stated a dovish version of the day, opening nearly 1% higher and then giving up most of the gains before the close.
This gap, between assembly and signature, is the part that no monitor can price. 12% for SoftBank and the rush to return to chip names, a move CNBC reported It has been among the biggest for months, the equivalent of a bet that the draft will last a week. If that happens, the war premium, which has been drained from oil and returned to chips on Monday, will remain off limits. If it doesn’t, the same leverage that carried the rally up is there to bring it back down. The market has chosen its direction. It has not yet been said whether his choice was correct.
