Asian stock markets surged to record highs on Monday, driven by an overwhelming wave of investor enthusiasm for artificial intelligence, as Japan’s Nikkei 225 breached the 67,000 mark for the first time and South Korea’s Kospi index soared nearly 5 per cent to an all-time peak.
AI fuels Asian rally
Tokyo’s Nikkei 225 gained more than 1.3 per cent to close at 67,231.28, crossing a fresh psychological barrier. The benchmark has risen more than 12 per cent over the past month. SoftBank Group, the investment giant with a heavy focus on AI through its ownership of Arm Holdings and its stake in OpenAI, jumped more than 9 per cent, propelling it past Toyota to become Japan’s most valuable company. Japan’s real GDP grew at an annualised rate of 2.1 per cent in the first quarter, with inflation edging close to the Bank of Japan’s target, supporting broader economic sentiment.
In South Korea, the Kospi index hit an all-time high of 8,874.16, with Samsung Electronics, the country’s largest company, rising more than 9 per cent. Official data on Monday showed that South Korea’s exports surged 53 per cent year-on-year in May, fuelled by robust global demand for semiconductors — a key component in AI systems. The Kospi has soared more than 27 per cent over the past month.
Elsewhere in the region, Hong Kong’s Hang Seng index rose 0.9 per cent to 25,408.96. The Shanghai Composite index edged down 0.1 per cent to 4,063.72 after China reported over the weekend that factory activity in May had softened, with signs of slowing new export demand. Australia’s S&P/ASX 200 slipped 0.1 per cent to 8,720.30. Taiwan’s Taiex climbed 1.4 per cent, and India’s Sensex added 0.6 per cent.
Oil prices jump on Iran uncertainty
The bullish mood in equities contrasted with tensions in energy markets. Oil prices jumped more than 2 per cent on Monday as negotiations between the United States and Iran continued over a potential ceasefire extension and the reopening of the Strait of Hormuz — a critical waterway through which roughly one-fifth of the world’s oil passes. Brent crude, the international benchmark, rose 2.4 per cent to $93.33 a barrel in early trading, up from around $70 a barrel in late February before the conflict began. US benchmark crude gained 2.8 per cent to $89.76 a barrel.
The war, which began on 28 February with coordinated US and Israeli strikes on Iran, has seen six weeks of intense military engagement. A ceasefire brokered by Pakistan and activated on 8 April has shown signs of strain. US military strikes targeting Iranian missile and drone sites near the Strait of Hormuz took place between 25 and 28 May, which US Central Command characterised as defensive. Iran accused Washington of violating the ceasefire terms and threatened retaliation. The US conducted further “self-defence” attacks on Iranian sites on 30–31 May, marking at least the third publicly announced US strike since the ceasefire began.
A proposed framework for a 60-day ceasefire extension, the restoration of unrestricted navigation through the Strait of Hormuz, and further negotiations on Iran’s nuclear programme is under consideration. Key figures involved include the US President’s administration, IRGC officials, CENTCOM representatives, and Pakistani mediator Mohammad Bagher Ghalibaf. Iran has pledged not to build a nuclear weapon as part of the potential deal. On Friday, US President Donald Trump met with advisers in high-level talks but had not yet decided on a tentative plan to extend the ceasefire by 60 days, while Iran said a deal was not finalised. The reopening of the Strait of Hormuz, which has been largely closed, and the US sea blockade on Iranian ports both remain in limbo.
Wall Street records powered by AI boom
The AI-driven rally that lifted Asian markets also propelled Wall Street to fresh highs. On Friday, the benchmark S&P 500 added 0.2 per cent in its seventh straight gain to 7,580.06. The Dow Jones Industrial Average climbed 0.7 per cent to 51,032.46, while the technology-heavy Nasdaq composite gained 0.2 per cent to 26,972.62. On 27 May, the S&P 500 and Nasdaq had already hit record closing highs for the second consecutive day.
Big technology stocks were at the centre of the surge. Dell Technologies surged 32.8 per cent following stronger-than-expected results and after it raised its outlook on strong AI-related demand. The company reported an 88 per cent year-over-year revenue increase in Q1 fiscal 2027, with AI server sales skyrocketing 757 per cent to $16.1 billion — surpassing its PC unit’s revenue in the quarter. Dell’s AI backlog stands at a record $51.3 billion, prompting analysts to issue significant price target increases. Microsoft rose more than 5.4 per cent, while Broadcom was up 4.7 per cent. Broadcom, a major player in AI chips, saw its AI revenue more than double in its fiscal first quarter of 2026, reaching $8.4 billion — a 106 per cent year-over-year increase — and is projected to generate over $100 billion in AI semiconductor revenue by 2027. Its stock has risen about 85 per cent over the past year.
The broader AI market is experiencing rapid growth driven by technological advancements in computing power, storage and algorithms; massive investment by cloud providers; an explosion of data; enterprise adoption for competitive advantage; the rise of generative AI; and the growing view of AI as core business infrastructure, akin to electricity or the internet.
In currency markets, the US dollar rose to 159.48 Japanese yen from 159.25 yen. The euro was trading at $1.1645, down from $1.1667.
