Chip stocks roar back: SK Hynix’s 11% jump sparks a 553-point Sensex rally

Chipmakers led a sharp regional rebound on Wednesday, with SK Hynix jumping 11% and a broader Asian semiconductor index gaining 3.5% as investors returned to the sector after a recent stretch of volatility. Kazuhiro Sasaki, head of research at Phillip Securities Japan, said ‘volatility has died down and we’re seeing some repurchasing in the chip sector. But rather than a full-blown return to tech, we’re seeing sector rotation continue — banks are attractive, especially after strong earnings in the US.’

The tech rebound powered a wider Asian equities rally. MSCI’s Asia Pacific equities gauge climbed 2%, on course for its biggest gain in a month, as South Korea’s Kospi surged around 7% and Japan’s Nikkei 225 and Hong Kong’s Hang Seng also traded higher, even as Shanghai’s SSE Composite lagged behind.

The move followed softer-than-expected US inflation data, with consumer price inflation easing to 3.5% in June against a market expectation of 3.8%, reinforcing hopes that the Federal Reserve could adopt a less aggressive monetary policy stance. US markets closed higher overnight, with the S&P 500 rising 0.38% and the Nasdaq advancing 0.90%.

India caught the same tailwind. The BSE Sensex jumped 553 points to 77,603.57 in early trade, while the NSE Nifty gained 148.15 points to 24,198.40, reversing Tuesday’s session in which the Sensex had dropped 561.46 points, or 0.72%, to close at 77,054.94.

Easing geopolitical tension added further support after Trump withdrew a proposed 20% transit fee on cargo passing through the Strait of Hormuz in favour of trade and investment agreements with Gulf countries, helping Brent crude settle around $85.6 a barrel.

Rajesh Palviya, head of research at Axis Direct, said supportive global cues and expectations of a more accommodative Federal Reserve policy helped improve investor sentiment, with the Nifty continuing to hold above its key 23,900 support level and the broader market bias remaining sideways to bullish.

Bombay Stock Exchange building at Dalal Street, Mumbai. Wikimedia Commons/by BSEINDIA (CC BY-SA 3.0).