Asian stock markets surged on Friday, driven by chip and artificial intelligence firms, as investors largely dismissed escalating tit-for-tat attacks between the U.S. and Iran in the Middle East. Brent crude futures were set for a 5% week-on-week rise, their strongest weekly performance since early May, but the price had already given up most gains picked up when the conflict began in the same year. Nick Twidale, chief market strategist at ATFX Global in Sydney, noted, "I'm looking at updates from the Middle East and things don't look good, but investors seem incredibly resilient to those risks at the moment, with tech again driving markets higher."
Who Profits from Conflict and Code
Japan's Nikkei index rose 1.8%. South Korea's KOSPI gained 4%. Chip bellwethers SK Hynix and Samsung Electronics saw their shares climb 1% and 3%, respectively. The MSCI's broadest index of Asia-Pacific shares outside Japan finished 1.3% higher. SK Hynix's South Korean shares have surged 238% this year, pushing the KOSPI to record highs and making it the world's best-performing major stock market since the second year. This surge in value directly benefits shareholders and executives, not the workers who produce the chips.
Overnight, the tech-heavy Nasdaq ended sharply higher. Micron Technology's plans to invest over $250 billion in the U.S. through 2035 buoyed chip stocks. The Philadelphia SE Semiconductor Index rose 3%. Attention also focused on SK Hynix's U.S. market debut later on Friday, after the firm priced its American Depositary Receipts at $149 on Thursday. This offering raised approximately $26.5 billion. The funds will finance new factories and equipment to meet surging AI chip demand, further concentrating capital in the hands of a few. This is set to be the world's second-biggest share sale, following SpaceX's record-breaking IPO last month. Sam Konrad, investment manager for Asia Equity Income at Jupiter Asset Management, holds shares in both South Korean firms. He stated the listing could mean the SK Hynix ADR trades at a premium to local shares, potentially supporting a re-rating in Samsung Electronics when they release details of their "shareholder return plans."
The State's Hand in Capital Accumulation
The Japanese state moved to bolster domestic capital markets. Finance Minister Satsuki Katayama announced on Friday that the government wants to explore ways to encourage pension funds, including the Government Pension Investment Fund, to increase their holdings of domestic financial assets. This represents the state directing collective retirement savings into private capital, ensuring a steady flow of investment for corporations. The yen received a lift from Katayama's comments, firming 0.5% against the U.S. dollar.
The "AI mania" has also spurred sharp swings in recent weeks. Investors fret about sky-high valuations and worry about the sustainability of their massive profit growth. This inherent instability underscores the speculative nature of capital accumulation, where value is detached from productive labor and instead driven by market sentiment and the promise of future surplus extraction. Gold, often seen as a safe haven during instability, looked set to post a 1% decline for the week, trading at $4,113 per ounce in early trading.