Asia Stocks Rally on AI Hopes as RBNZ Surprise Hold Hits Kiwi
Asia stocks rallied on Wednesday as renewed optimism about artificial intelligence lifted sentiment ahead of earnings from major US tech companies. The New Zealand dollar moved the other way, tumbling after the Reserve Bank of New Zealand (RBNZ) left interest rates unchanged, a decision most traders had not expected. South Korea’s Kospi jumped more than 6% after chipmaker SK Hynix reported a roughly sevenfold rise in third-quarter profit.
SK Hynix said operating profit for the quarter reached about 83.3 trillion won, up roughly 7.3 times from a year earlier and ahead of the 76.7 trillion won analysts polled by LSEG had forecast.
Net profit, however, missed expectations. The company also said it would return about 100 trillion won, roughly $75 billion, to shareholders this year, and its shares rose about 9%. In New Zealand, the RBNZ held its official cash rate at 2.75% in a 4-3 vote. Westpac said markets had priced in better than a 70% chance of a hike, and the kiwi fell more than 1%. Governor Breman later said further increases were likely at coming meetings.
The rally shows how much Asia stocks now lean on the AI trade. SK Hynix, a major Nvidia supplier, has benefited as memory chip prices climbed on AI demand, and investors want to see whether Alphabet and Microsoft can show that heavy AI spending is paying off. Funding worries linger.
Market commentary pointed to rising bond yields at cloud providers such as CoreWeave and record costs to insure Meta debt. The RBNZ’s pause also stood apart from Australia, where third-quarter trimmed mean inflation of 3.7% beat forecasts and strengthened the case for a Reserve Bank of Australia rate rise.
Alphabet and Microsoft report later on Wednesday, US time, and the US Federal Reserve announces its rate decision the same day. The RBA board meets on November 3, where a hike is now seen as more likely. Traders will also watch whether the RBNZ follows through on its signal of tighter policy.