Record market levels in Taiwan and South Korea helped to lift emerging Asian equities close to a five-year high in trading on Monday.
Investors continued to favour AI-linked assets and appeared to largely turn a blind eye to US military intervention in Venezuela.
The MSCI index of emerging Asia equities rose about 2% to its highest since late February 2021 and a gauge of ASEAN stocks touched its highest level since January 30, 2020.
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A broader index of global EM equities extended gains into a seventh consecutive session, and was trading just a few points shy of its lifetime high touched earlier in the day.
Global markets shrugged off the US capture of Venezuelan President Nicolas Maduro on the weekend and warnings of further strikes on Venezuela, as well as the threats of military action in Colombia and Mexico.
However, the geopolitical jolt has injected fresh risks into global financial markets, particularly oil, as Maduro’s capture could unlock Venezuela’s vast oil reserves and worsen a supply glut.
Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank, said the sanctions on Venezuela and its heavy dependence on oil exports mean the impact of regime change through trade or investment channels is “limited and ring-fenced”.
TSMC shares surge
In EM Asia, Taiwan’s benchmark index finished the day 2.6% higher at a record closing level of 30,105.04 points, driven by a 5.4% surge in TSMC, the world’s largest contract chipmaker.
South Korea’s KOSPI index shot up 3.4% to settle at its lifetime peak and highest closing level of 4,457.52 points.
Taiwan and South Korean equities were the top beneficiaries of the AI-trade in 2025 and are set to remain in favour as investors continue to ride AI optimism.
“US AI capex should remain a meaningful driver for Asia tech, but the market is shifting from ‘bigger spend’ to ‘better returns’,” Song Zhe, a senior investment specialist at BNP Paribas in Hong Kong, said.
“We still see a multi-year build-out: hyper-scalers are in a competitive arms race, and power, networking and memory constraints tend to stretch cycles rather than stop them.”
Singapore, Jakarta near all-time highs
Stocks in Singapore and Indonesia also traded around their all-time highs, advancing 0.7% and 1%, respectively.
Currencies in emerging Asia were on the back foot against a firmer dollar, with the index jumping to a more than three-week high against a basket of major currencies.
The Malaysian ringgit fell around 0.5% and the South Korean won slipped 0.2%.
South Korea’s policymakers pledged to steady the won by tackling structural foreign exchange imbalances, as Finance Minister Koo Yun-cheol added that the government will offer tax incentives for long-term domestic stock investment.
Thailand’s baht jumped 0.4% to 31.36 per US dollar, potentially resuming its uptrend after weakening as much as 2% during the year-end holiday lull.
Other highlights included:
- Yield on India’s 10-year sovereign bond jumped to 6.643%.
- Indonesia’s trade surplus was less than forecast, as inflation quickens.
- Japan’s bond yields hit near 30-year highs on BOJ rate-hike bets.
- Minister says the Philippines’ 2026 growth seen at 5.0 to 6.0%.
- Reuters with additional editing by Jim Pollard
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