The march higher continues. Selectively.<\/p>\n
Investors in Asia looked past the implications of Wednesday\u2019s U.S. Fed policy meeting<\/a> to bid up Asian equities Thursday, figuring the \u201clower\u201d cost of oil will ease inflationary pressures and more than offset any potential higher borrowing costs down the road.<\/p>\n It is the three East Asian markets in Tokyo, Seoul and Taipei that continue to set and renew all-time records. They\u2019ve done it again Thursday.<\/p>\n We\u2019ve had an interest-rate rise in Japan, with rates rising to their highest level in 31 years. But there are positives to take out of that decision from the Bank of Japan, as I outlined in my last column<\/a>.<\/p>\n Plenty of Losers Around Asia<\/p>\n We shouldn\u2019t let these new stock-market records blind us to the reality that there are real winners and losers in Asia this year.<\/p>\n Markets in Hong Kong and China are nearing or already at bear-market territory, with the Hang Seng benchmark in Hong Kong down 6.7% year to date. Hong Kong stocks dipped again Thursday, down 1.6% to directly reflect the potential for future Fed rate hikes. Hong Kong\u2019s currency is pegged to the U.S. dollar at a fixed exchange rate, which means Hong Kong effectively doesn\u2019t set its own monetary policy and instead \u201cimports\u201d U.S. interest rates.<\/p>\n Indian equities have been mired in underperformance for more than a year. The Nifty 50 has lost 7.8% year to date, while the Sensex is 9.2% lower. The New Zealand stock market is struggling for direction and down 1.4% in 2026 as of Thursday. Australian equities are only just in the black, the S&P\/ASX 200 benchmark down 0.6% Thursday and up just 2.3% this year.<\/p>\n Indonesian equities are the worst performers in the region, down 28.6% given doubts over the leadership of President Prabowo Subianto, and as index providers pressure regulators to improve governance.<\/p>\n Chip Stocks Push East Asia to New Highs<\/p>\n But you will find none of that negativity in East Asia, where semiconductor stocks and Artificial Intelligence (AI) plays continue to push markets to new records.<\/p>\n I got the first chance to dig into the implications of the Fed meeting on Thursday\u2019s Money Talk podcast with Peter Lewis. There\u2019s a link to the Spotify version of the show here<\/a>.<\/p>\n You can also find details of the very handy daily newsletter that Peter puts together, focusing on Asian angles, here<\/a>. It\u2019s on Substack or delivered by email into your inbox daily.<\/p>\n Indexes Set New High-Water Marks<\/p>\n In Japan, the Nikkei 225 Thursday crested above 71,000 for the first time in history, and set a new all-time closing high, up 1.65% to 71,053.<\/p>\n The broad-market Topix, which moved past 4,000 for the first time on Monday, finished at a fresh record of 4,068, with a 1.4% rise Thursday.<\/p>\n Likewise, in South Korea, the Kospi topped the 9,000 mark for the first time ever, with the Korean benchmark adding 2.3% on the day to finish at a record 9,064.<\/p>\n The Seoul market continues to lead the world with a 115.1% year-to-date rise, thanks in large part to its high concentration in chip manufacturing.<\/p>\n Taiwan Central Bank Raises Growth Forecast<\/p>\n In Taiwan, the Taiex rose 1.3% to end Thursday at a new record closing high of 46,465.20. That re-set the June 3 record, the first day the Taiwan index moved past 46,000.<\/p>\n Taiwan\u2019s central bank Thursday upped its growth outlook for the year, thanks to the boom in AI interest. That directly benefits Taiwan Semiconductor Manufacturing Co. (TSM<\/a>) (TW:2330), which has a commanding 73% market share of worldwide chip foundry production.<\/p>\n Taiwan\u2019s economy increased 8.68% last year, the fastest pace in 15 years. The Taiwan central bank now expects growth of 9.45% for 2026, up from its March forecast of 7.25%. Still, the central bank left interest rates unchanged at 2.0%, with the board shifting to a hawkish stance and warning that inflation needs to be \u201cclosely monitored.\u201d<\/p>\n TSMC\u2019s Strong Showing<\/p>\n We saw TSMC inch ahead 1.1% Thursday, giving it a 55.5% increase on the year so far. As I noted heading into this year, TSMC is one of my perennial favorite investments in Asia, although I forced myself<\/a> to look beyond it in picking Tokyo-listed chip-testing equipment maker Advantest (ATEYY<\/a>) (T:6857) as my Asian equity pick for 2026.<\/p>\n Advantest is up 54.3%, essentially matching that strong showing from TSMC. I remain very happy with that pick so long as this rally in semiconductors is sustained.<\/p>\n The biggest concern would be the overcrowding into those trades, as well as the amount of leverage investors are taking on to access them.<\/p>\n Heavy Crowding Into Chip-Stock Trade<\/p>\n I get a regular report from Interactive Brokers telling me what the most active stocks are on that platform. It\u2019s a five-day moving average of orders. And it\u2019s shocking how concentrated the list is.<\/p>\n Check out the top 15 tickers:<\/p>\n SpaceX (SPCX<\/a>)<\/p>\n Micron Technology (MU<\/a>)<\/p>\n Direxion Daily Semiconductor Bull 3x ETF (SOXL<\/a>)<\/p>\n Nvidia (NVDA<\/a>)<\/p>\n Marvell Technology (MRVL<\/a>)<\/p>\n Intel (INTC<\/a>)<\/p>\n Tesla (TSLA<\/a>)<\/p>\n SanDisk (SNDK<\/a>)<\/p>\n Microsoft (MSFT<\/a>)<\/p>\n Invesco QQQ Trust (QQQ<\/a>)<\/p>\n Advanced Micro Devices (AMD<\/a>)<\/p>\n Oracle (ORCL<\/a>)<\/p>\n ProShares UltraPro QQQ (TQQQ<\/a>)<\/p>\n Direxion Daily Semiconductor Bear 3x ETF (SOXS<\/a>)<\/p>\n