Equities: AI and peace hopes drive divergence – BNY

BNY’s Bob Savage highlights that global equities extend gains on AI optimism and Iran peace talks. South Korean chip names power the KOSPI to records, while Chinese stocks lag despite strong profit data. iFlow shows broad equity outflows, with selective inflows into New Zealand, Singapore, Thailand and China.

AI chip boom versus selective outflows

"Global equities have extended their rally on AI optimism and ongoing peace talks with Iran in Pakistan. The Eid al-Adha holiday meant markets in much of South Asia were closed, while liquidity across markets remains focused on month-end and rebalancing."

"Chinese equities fell, countering the wider APAC rally, even as January-April industrial profits rose 18.2% y/y. "

" SK Hynix has joined the $1tn market capitalization club, which includes Samsung and Micron, on the back of AI memory chip demand. The South Korean KOSPI printed a new record high, with Samsung and SK Hynix accounting for half of the index."

"Broad-based outflows dominated across the iFlow universe, led by Japan, Indonesia and South Korea. Selected inflows were seen in Norway, New Zealand, Singapore, Thailand and China. Within DM sectors, utilities, materials and energy underperformed, while financials and consumer staples attracted buying."

"Samsung is up 149% YTD while SK Hynix has gained 215%. Their U.S. counterpart Micron is up 245% YTD. Expectations are that semiconductor chip prices will rise 63% in Q2. The investment boom continues, with returns from data centers justifying the money flow."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)