Global stocks rose on Friday with Wall Street headed for a muted open, as AI-related enthusiasm in Asia over the market debut of South Korean chip bellwether SK Hynix led investors to brush off tit-for-tat attacks between the US and Iran.
US S&P 500 futures steadied as Nasdaq futures ticked 0.3 per cent lower.
While the renewed back-and-forth attacks have further eroded the fragile three-week-old US-Iran ceasefire, markets have mostly taken developments in the Middle East in their stride, although oil prices and their inflationary impact are back on investors' radar.
"The level of concentration build-up and momentum behind chipmakers (or anything that has to do with AI) has caused real distortion and dispersion in markets is beyond anything I have seen in my career," said Justin Onuekwusi, chief investment officer at St James's Place.
Macroeconomic challenges like geopolitics and the risk of stagflation have lately had little significant impact on markets, he said.
European shares were muted on Friday, with the pan-European STOXX 600 up 0.2 per cent, remaining on track for a weekly loss that could snap a four-week winning streak.
In Asia, Japan's Nikkei closed 1.2 per cent higher while South Korea's KOSPI, the epicentre of the AI rally, ended with gains of more than 2.5 per cent, only a few sessions after Wednesday's dramatic 5 per cent drop that put the index in bear territory.
Japan's bond market and currency lurched higher after Finance Minister Satsuki Katayama said on Friday the government wants to explore ways to encourage pension funds, including the Government Pension Investment Fund, to increase their holdings of domestic financial assets.
Brent crude futures were set for a 5 per cent week-on-week rise, the strongest weekly performance since early May. But at $76.17 per barrel, down 11 cents on the day, Brent has given up most of the gains it picked up when the conflict began at the end of February.
"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," said Nick Twidale, chief market strategist at ATFX Global in Sydney.
Overnight, the tech-heavy Nasdaq ended sharply higher after Micron Technology's plans to invest more than $250 billion in the US through 2035 buoyed chip stocks, with the Philadelphia SE Semiconductor Index rising 3 per cent.
Attention will be on SK Hynix's US market debut later on Friday after the firm priced its American Depositary Receipts at $149 on Thursday, raising about $26.5 billion, indicating strong investor appetite to gain exposure to the AI supply chain.
The blockbuster offering, which will finance new factories and equipment to meet surging AI chip demand, is set to be the world's second-biggest share sale after SpaceX's record-breaking IPO last month.
Sam Konrad, investment manager for Asia Equity Income at Jupiter Asset Management, said the listing could mean that the SK Hynix ADR trades at a premium to the local shares, but it could still help re-rate the South Korean-listed shares.
SK Hynix's South Korean shares have more than tripled this year, taking the broader benchmark to record highs and making the KOSPI the world's best-performing major stock market since the start of 2025.
In currency markets, attention remained on the Japanese yen, which firmed sharply after Katayama's comments suggesting repatriation could be in store for Japanese investors.
It was last 0.4 per cent stronger at 161.74 per US dollar. The frail yen has been hanging around its lowest level in 40 years in recent days as traders kept a watch for official intervention from Tokyo.
Masahiko Loo, senior fixed income strategist at State Street Investment Management, said the announcement is a smart policy signal as markets have increasingly questioned how much firepower the Ministry of Finance has left for intervention. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
