Asian Markets Snap Back: Kospi and Nikkei Rebound a Day After the Chip Selloff

Asian markets snapped back on Wednesday, reversing much of Tuesday’s chip-led selloff as investors who had fled semiconductor and artificial intelligence shares a day earlier came back in force. Reuters reported that MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5% on Wednesday, led by a roughly 4% early gain for Korean shares, while Japan’s Nikkei 225 climbed 1.3% and S&P 500 e-mini futures rose 0.3%. Bonds stabilised after the previous session’s turbulence, Reuters said in its Global Markets wrap.

The midday picture, as the Associated Press reported it, was a near mirror image of the day before. By midday in Seoul, the Kospi was up 3.4% at 5,733.82, and in Tokyo the Nikkei 225 had risen 1.3% to 64,915.59, the Associated Press said. Those are intraday, midday levels rather than closing figures, but the direction was unmistakable: the two indexes at the center of Tuesday’s rout were leading the region higher. Taiwan’s Taiex rose 1.5%, the Associated Press reported, while the mainland and Hong Kong markets lagged — Hong Kong’s Hang Seng edged down 0.1% to 23,836.46 and the Shanghai Composite fell 0.3% to 3,723.95. Australia’s S&P/ASX 200 shed 0.1% to 8,809.60.

A reversal built on Tuesday’s wreckage

To understand Wednesday, start with Tuesday. As Previously reported in yesterday’s slide story, the Kospi closed down 3.73% at 5,552.74 and the Nikkei fell 1.30% to 64,075.42 in a chip-led slide that rattled the whole region. The trigger most often cited was the debut of South Korean AI company Elice, whose shares plunged roughly 32% in their first session — a stomach-churning first day that raised uncomfortable questions about how much of the AI trade was priced on hope rather than earnings.

Wednesday’s session retraced much of that damage in a matter of hours. The Kospi’s midday level of 5,733.82 sat well above Tuesday’s close, and the Nikkei’s midday 64,915.59 recovered the bulk of its Tuesday loss. Rebounds of this size, this fast, usually say less about new information than about positioning: sellers who wanted out got out on Tuesday, and by Wednesday morning the buyers who had been waiting for a cheaper entry into the chip trade decided this was it.

Elice bounces to its limit — and the chip giants follow

The most dramatic single-stock move belonged to the company that started the trouble. The Associated Press said Elice shares hit the upward limit of 29.9% on Wednesday — a limit-up session that almost exactly unwound Tuesday’s debut collapse. Figures from CNBC carried by Mettis Global put the move at 29.92%, alongside a 6.38% surge for SK Hynix and a 5.03% gain for Samsung Electronics, the two heavyweight chipmakers whose weight in the Kospi means the index rarely moves far without them.

That trio tells the story of the day. When Elice, SK Hynix and Samsung all rise together, Seoul rises; when they fall together, as they did on Tuesday, Seoul falls hard. Wednesday’s breadth in the chip complex — not just one speculative name but the two established giants as well — gave the rebound a sturdier feel than a single-stock bounce would have. Whether it holds depends on the same question that hung over Tuesday’s selloff: whether AI spending keeps converting into earnings fast enough to justify the valuations investors paid before this week’s wobble.

Wall Street handed Asia a better night than expected

Asia did not rebound in a vacuum. Tuesday’s Wall Street session, which set the tone for Wednesday’s Asian open, saw most U.S. stocks rise on strong profit reports, with Equifax and Hasbro among the companies whose results pleased investors, the Associated Press reported. Oil prices eased after nearing their highest levels since the war with Iran began, taking some pressure off the energy-cost worries that have dogged markets for weeks.

The earnings backdrop is genuinely strong so far. Reuters reported that with 13% of S&P 500 companies having reported, 86% have beaten estimates, according to LSEG data. That is the kind of beat rate that lets investors treat a selloff as a buying opportunity rather than the start of something worse. Westpac analysts wrote: “Global equities were mixed, with solid earnings supporting US markets while ongoing concerns around the AI trade and elevated oil and borrowing costs weighed more heavily elsewhere.” That split — earnings pulling one way, AI anxiety and borrowing costs pulling the other — was visible in Wednesday’s Asia session too, where chip-heavy Seoul, Tokyo and Taipei surged while Hong Kong and Shanghai, less levered to the AI complex, drifted lower.

Japan’s trade numbers cut both ways

Tokyo’s rebound came with fresh data to chew on. Japan’s exports jumped 16.7% in September from a year earlier on strong autos and computer-related components, the Associated Press reported — evidence that demand for the hardware behind the AI build-out remains intense. But imports surged 18.9%, largely on higher oil prices driven by the Iran war, nearly doubling Japan’s trade deficit. Exporters cheered the top line; the import bill was a reminder that the same war lifting energy prices is taxing every economy that has to buy its fuel abroad.

Oxford Economics said: “Robust AI demand should continue to support tech-related goods exports. However, non-AI capital goods and auto are likely to weaken amid high energy prices and borrowing costs, weighing on overall exports.” The chip-equipment names at the heart of that trade led Tokyo higher anyway: Advantest climbed 5.31%, Tokyo Electron rose 3.02% and SoftBank Group advanced 4.70%, according to CNBC figures carried by Mettis Global. For one session, at least, investors chose the AI-demand half of the Oxford Economics warning over the weakening-exports half.

The SpaceX effect, and the one market that fell

Sentiment toward AI infrastructure also got help from the United States after hours. As Previously covered live, SpaceX posted its first profit as a public company, with its AI segment doing the heavy lifting, and Super Micro surged in post-market trading. For Asian chip and server supply chains that sell into exactly that build-out, a profitable SpaceX and a hot Super Micro print read as demand validation — one more reason Wednesday’s buyers were willing to step back into names they had dumped 24 hours earlier.

The exception to the global relief was France. French stocks fell on government plans to curb unrest, Reuters reported, after Prime Minister Sebastien Lecornu said the government would reinforce police with a “massive” deployment of troops ahead of protests planned for Saturday. The French 10-year OAT yield rose 2.7 basis points to 4.94%, Reuters said — a small move in the bond market that underlined how political risk, not earnings, was setting the price in Paris while the rest of the world traded on profits and chips.

What happens next turns on whether Wednesday was a genuine reset or a one-day reflex. Tuesday’s selloff was fast, concentrated and tied to a single alarming debut; Wednesday’s rebound was fast, broad across the chip complex and backed by an 86% earnings beat rate in the United States. Both can be true at once: the AI trade can be fundamentally intact and still priced for a perfection that leaves no room for another Elice-style surprise. Asian investors, having now lived both days back to back, do not need that explained to them.