(May 6): Asian currencies gained on Wednesday as US efforts to reach a peace deal with Iran eased investor caution and fanned a chip rally, which bumped up Samsung to the US$1 trillion (RM3.9 trillion) club and drove South Korean shares to an all-time high.
Samsung Electronics soared 14.4% to become the second Asian company after Taiwan’s TSMC to hit that milestone, as investors shifted focus towards positive tech earnings that signal continued demand for chips to power data centers that form a part of big tech’s massive capital expenditure plans.
“The AI & semiconductor supercycle is the dominant driver. Markets are citing ongoing earnings improvement from expanded AI infrastructure investment and a recovery in the semiconductor industry,” said Inki Cho, senior financial market strategist at Exness.
The world’s second largest memory chipmaker SK Hynix also lifted South Korea’s shares, with the benchmark index ending up 6.5% at its highest closing level. The index has advanced nearly 12% in May alone, bringing 2026 gains to over 75%, and markets believe there to be more room for the chip rally to advance.
CW Chung, co-head of Apac equity research at Nomura, said that Samsung continues to trade at “very low multiples” due to cyclical stock discounts, and sees more room for the Kospi to advance on re-rating of chip stocks, which make up nearly half of the benchmark.
Taiwan stocks also followed suit, ending up 0.9% to their highest close.
Firming hopes of an Iran peace deal helped appetite, after US President Donald Trump said on Tuesday he would briefly pause an operation escorting ships through the Strait of Hormuz, which carries about a fifth of global oil, citing “great progress” towards a comprehensive agreement with Iran.
Iran said it would only accept “a fair and comprehensive agreement” in its negotiations with the US on ending the war.
Oil prices slipped, easing some pressure off Asian currencies that have been battered by the crisis, as higher oil import bills have fueled inflation and growth concerns. The conflict has driven Thailand and Philippines’ annual inflation to three-year highs.
“The announcements have soothed markets again providing hope that all sides would keep working in the direction of achieving peace,” Maybank analysts said in a note.
The South Korean won gained to 1,476.50, reaching its strongest level since Feb 27.
The Malaysian ringgit rose 0.3% to 3.9470 per dollar. The country’s central bank is expected to keep its main policy rate unchanged at 2.75% on Thursday and through the rest of the year, a Reuters poll of economists showed.
The Indonesian rupiah and the Philippine peso both stabilised after dropping to all-time lows earlier in the week. The peso has lost more than 6% since the conflict began in late February, making it the worst showing among Asian peers.
Uploaded by Magessan Varatharaja
