Japanese and South Korean equities surged on Wednesday, while Hong Kong and mainland China posted more moderate gains. Semiconductor stocks led the advance as falling oil prices and renewed hopes of progress in the Middle East improved global risk appetite.
By FinanceMarkets.info — August 5, 2026
Asian stock markets advanced sharply on Wednesday, August 5, with technology-heavy indices in Japan and South Korea leading a broad regional rebound. Strong corporate earnings, renewed enthusiasm for artificial intelligence and lower oil prices encouraged investors to return to risk assets.
The MSCI Asia-Pacific index excluding Japan gained approximately 2.3% during the session, while Japan’s Nikkei 225 and South Korea’s Kospi recorded some of the region’s largest increases.
The rally followed another record-setting session on Wall Street, although disappointing reactions to the latest results from AMD and SpaceX demonstrated that investors remain sensitive to high valuations and rapidly rising AI investment costs.
Asian market performance
| Market | Index | Session performance* |
|---|---|---|
| Japan | Nikkei 225 | Around +3.0% to +3.5% |
| South Korea | Kospi | Around +4.3% |
| Mainland China | CSI 300 | Around +1.5% |
| Hong Kong | Hang Seng | Around +0.3% to +0.5% |
| Australia | S&P/ASX 200 | +0.9% |
| Asia ex-Japan | MSCI regional index | Around +2.3% |
*Figures available during or shortly after the Asian session and may differ slightly from final official closing data.
Japan rallies as technology stocks rebound
Japan’s Nikkei 225 jumped by approximately 3%, approaching the 66,000-point level after closing at 63,957.53 on Tuesday. Electronics, semiconductor equipment and AI-related companies led the advance.
SoftBank Group was among the session’s strongest performers, rising by more than 10% as investors returned to technology and AI-linked shares. Semiconductor testing equipment producer Advantest and memory-chip specialist Kioxia also advanced strongly.
The Japanese market benefited from the combination of recovering technology sentiment and falling energy prices. Japan imports most of its oil, meaning a sustained decline in crude prices could reduce pressure on corporate costs and the country’s trade balance.
The dollar traded around ¥157.6, remaining relatively stable against the Japanese currency. Investors nevertheless continue to monitor the possibility of future intervention or additional monetary tightening by the Bank of Japan.
South Korea leads regional gains
South Korea delivered the strongest performance among the major Asian markets. The Kospi rose by more than 4%, recovering part of the heavy losses recorded during the recent technology-sector correction.
SK Hynix gained approximately 6%, while Samsung Electronics also moved higher. The two semiconductor groups had suffered substantial volatility in recent weeks as investors questioned whether the rapid expansion of AI infrastructure spending could continue without pressuring margins and cash flow.
Wednesday’s recovery suggests that demand for leading Asian chipmakers remains strong despite these concerns. The rebound also followed reports that Samsung Electronics and SK Hynix were assessing additional semiconductor equipment suppliers, potentially diversifying their production chains.
However, South Korea remains one of the region’s most volatile markets. The Kospi experienced an exceptionally strong first half of 2026 before a sharp correction in July, leaving investors highly sensitive to news concerning memory-chip prices, AI expenditure and global technology demand.
China and Hong Kong post more modest advances
Mainland Chinese shares also moved higher, although their gains were less spectacular than those recorded in Japan and South Korea. The CSI 300 index of large-cap Chinese companies gained approximately 1.5%.
Hong Kong’s Hang Seng Index traded moderately higher near 25,950 points after moving between gains and losses earlier in the session. The index had closed at 25,852.92 on Tuesday, ending a six-session winning streak.
Chinese equities were supported by the broader improvement in risk appetite, but investors remain focused on the country’s economic recovery, property-sector conditions and the possibility of additional policy support from Beijing.
The more restrained performance in Hong Kong also reflected profit-taking following the market’s recent rise.
Australian shares reach another record
Australia’s S&P/ASX 200 closed 0.9% higher at approximately 9,228 points, setting a new record.
Mining companies were among the principal contributors, with BHP benefiting from renewed demand for commodity-related stocks. Materials, healthcare, technology and industrial companies also supported the index.
Commonwealth Bank of Australia was among the notable laggards, illustrating continued investor concerns about elevated valuations in the banking sector. Australian bank shares are trading at substantial premiums to their historical averages, increasing the risk of profit-taking during the upcoming earnings season.
Falling oil prices improve market sentiment
Lower oil prices provided another important catalyst for Asian equities. Brent crude fell below $79 per barrel, while US crude traded close to $75.
Markets reacted to signs that diplomatic negotiations could make progress towards reopening the Strait of Hormuz and reducing tensions surrounding the conflict involving the United States and Iran.
A reopening of the strategic waterway would reduce the risk of supply disruptions and ease inflationary pressure on energy-importing economies, particularly Japan, South Korea, India and much of Southeast Asia.
Lower crude prices also pushed government bond yields down and reduced expectations that the US Federal Reserve would need to raise interest rates again in September.
Winners and losers of the session
Among the most notable winners were:
- SoftBank Group, up more than 10% as AI-related sentiment improved.
- SK Hynix, up approximately 6% during the Korean technology rebound.
- Samsung Electronics, supported by renewed demand for semiconductor shares.
- Advantest and Kioxia, which benefited from stronger appetite for Japanese chip stocks.
- BHP, helping Australia’s ASX 200 reach a record high.
The list of underperformers was comparatively limited during the broadly positive session. Commonwealth Bank lagged in Australia, while some Hong Kong financial and technology heavyweights struggled to keep pace with the much stronger rallies recorded elsewhere in Asia.
The New Zealand dollar also weakened after the country’s unemployment rate reportedly reached its highest level in around a decade.
Market outlook
Wednesday’s advance represents an important recovery for Asian technology markets following several weeks of extreme volatility. Nevertheless, the sustainability of the rebound will depend on corporate earnings and evidence that AI-related expenditure can generate sufficient revenue and profits.
Investors will also continue to monitor Middle East negotiations, oil prices, US monetary policy and the latest signals from the Bank of Japan.
For now, falling energy prices and renewed demand for semiconductor stocks have restored a more constructive tone across Asian markets—but recent price swings suggest that volatility is unlikely to disappear.
Sources: Reuters – Stocks up in Asia as tech mood shifts, oil slides, Associated Press – Asian shares gain as oil prices ease, MarketWatch – Hang Seng Index, Trading Economics – Japan Stock Market.
