Market Wrap US-Europe-Asia 31 July: Kospi Surges 17.9 Percent in Record Chip Rally

By The Edge Research Team

A historic rebound in semiconductor and artificial-intelligence shares swept across Asia on Friday and carried into Western markets, with South Korea’s Kospi posting its largest single-day gain on record, Taiwan’s Taiex logging its biggest one-day advance and Japan’s Nikkei jumping more than four percent. On Wall Street the Nasdaq Composite added 1.00 percent, led by a surge in Amazon, though a sharp fall in Apple showed the advance was concentrated rather than uniform, per CNBC. Oil firmed, gold eased and Treasury yields rose.

In the United States, stocks extended their rebound into a second session, driven by megacap earnings. The Nasdaq Composite rose 1.00 percent to 25,373.85, the S&P 500 gained 0.70 percent to 7,489.78 and the Dow Jones Industrial Average added 0.53 percent to 52,485.74, per CNBC. Amazon jumped about 15.3 percent after strong quarterly results eased concerns over the payoff from heavy AI spending, while Apple fell about 7.4 percent, leaving the gains concentrated among selected winners. Microsoft and Nvidia each added about 3 percent, and the volatility index eased 6.44 percent to 15.99.

Europe closed mostly higher. France’s CAC 40 rose 0.28 percent to 8,509.64 and the Euro Stoxx 50 added 0.21 percent to 6,358.01, while Germany’s DAX was little changed, up 0.07 percent to 25,629.24, per CNBC. Britain’s FTSE 100 was the exception, easing 0.27 percent to 10,868.05.

Asia delivered the day’s most dramatic moves. South Korea’s Kospi soared a record 17.91 percent to 6,595.45 and the Kosdaq jumped 11.63 percent to 719.76, recovering from a run of losses after the megacap earnings eased fears over AI spending, per CNBC and the Korea Exchange. Taiwan’s Taiex posted its largest one-day advance, rising 7.98 percent to 43,119.75 on a limit-up move in its dominant chipmaker, while Japan’s Nikkei 225 climbed 4.03 percent to 64,362.02 and the Topix 1.29 percent to 4,003.30. In mainland China the Shenzhen Component gained 2.21 percent to 13,578.93 and the Shanghai Composite 0.72 percent to 3,832.26, while India’s Nifty 50, Hong Kong’s Hang Seng and Australia’s ASX 200 edged higher and Singapore’s Straits Times eased 0.79 percent.

In commodities, oil firmed while gold retreated. Brent crude traded at 90.09 dollars a barrel, up 1.19 percent, and West Texas Intermediate at 84.79 dollars, higher by 1.44 percent, per CNBC, as the market rebuilt part of the security premium tied to the Middle East conflict. Gold eased 1.26 percent to 4,108.30 dollars an ounce as Treasury yields rose, unwinding part of the week’s safe-haven bid.

In currencies and crypto, the dollar was broadly steady. The euro held at 1.1530 and sterling firmed 0.11 percent to 1.3479, while the yen strengthened 0.28 percent to 159.06 per dollar, per CNBC. The US 10-year Treasury yield rose about 7 basis points to 4.737 percent. With Kuwait’s market closed for the weekend, the dinar is carried at its latest official reference of 0.3077 to the dollar, while Bitcoin fell 2.83 percent to about 62,934 dollars.

Across the Gulf, most markets were closed for the weekend, with the UAE the exception. Dubai’s DFM General Index edged up 0.07 percent to 5,795.93 and Abu Dhabi’s FADGI rose 0.36 percent to 9,914.62 in a normal Friday session, per the exchanges, while the Saudi, Kuwaiti, Qatari, Bahraini, Omani and Egyptian markets were shut and will reopen next week.

Why it matters: The scale of the rebound, above all the record gains in Korea and Taiwan, signals a sharp recovery in risk appetite, but it also shows how position-driven the AI and semiconductor trade has become, our reading. The advance was concentrated in the markets and companies most exposed to chips and AI infrastructure, while Apple’s fall showed investors still distinguish sharply between winners and laggards. For the Gulf the backdrop is constructive: Brent back above 90 dollars underpins the export revenue of oil producers such as Saudi Arabia, Kuwait, the UAE and Oman, while Qatar’s gas-heavy exports are tied more to LNG pricing. The steadier dollar supports regional assets, though higher US Treasury yields raise financing costs for the dollar-linked Gulf economies, and the retreat in gold trims the mark-to-market value of official reserves after this week’s gains.

Outlook: The immediate test is whether the extraordinary gains in Korea and Taiwan hold when Asian markets reopen or partly reverse after such a sharp one-day move, our reading. Investors will also watch whether the US advance broadens beyond individual earnings winners, the path of the dollar and Treasury yields into the Federal Reserve’s next meeting, and whether oil sustains its rebound above 90 dollars on Brent. The Gulf markets will absorb this week’s global moves, including the extreme Asian chip rebounds, when they reopen next week.

Table – US and Europe equities, 31 July close, ranked by change:

Table – Asia equities, 31 July close, ranked by change:

Table – Commodities, rates, currencies and crypto, intraday 31 July:

Sources: CNBC; Reuters; Korea Exchange; Taiwan Stock Exchange; Abu Dhabi Securities Exchange; Dubai Financial Market.

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