South Korea's benchmark Kospi index logged its strongest monthly gain, up nearly 31%, since January 1998, powered by a surge in tech stocks that has helped the market shrug off geopolitical tensions in the Middle East.
The index's outsized gains have been driven largely by optimism around the artificial intelligence boom, with semiconductor giants and heavyweights SK Hynix and Samsung Electronics leading the charge, up 60% and 35%, respectively on month.
HSBC last week upgraded South Korea to "neutral" from "underweight," saying recent foreign outflows had helped unwind crowded positioning in the market and reduced downside risks from geopolitical volatility.
Beyond the heavyweight chipmakers, HSBC said broader growth themes in areas such as energy storage, shipbuilding, defense and nuclear power are also supporting the market's rally.
The milestone rally comes as the broader Asia-Pacific markets, including the Kospi, declined Thursday, pressured by a spike in oil prices that hit 4-year highs, before paring gains, on fears of potential U.S. military action against Iran and lingering uncertainty after the Federal Reserve held rates steady.
The Kospi fell 1.38% to 6,598.8, while the small-cap Kosdaq lost 2.29% to 1,192.35.
In Australia, the S&P/ASX 200 lost 0.24% to end the trading day at 8,665.8.
Japanese markets declined as trading resumed after a holiday. The benchmark Nikkei 225 lost 1.06% to close at 59,284.92 while the Topix fell 1.19% to 3,727.21.
Hong Kong's Hang Seng index was down 1.27% as of its last hour of trade, while mainland China's CSI 300 closed flat at 4,807.30
Oil climbed after Axios, citing two sources with knowledge of the matter, reported that the U.S. Central Command was set to present U.S. President Donald Trump plans for possible military action against Iran.
Trump had earlier reportedly rejected Tehran's proposal to reopen the Strait of Hormuz, signaling the naval blockade will remain in place until a broader nuclear agreement is reached.Â
June futures for international benchmark Brent crude were last up 3.4% at $121.98 a barrel Thursday, while U.S. West Texas Intermediate added 1.21% to $108.22.
Brent crude has surged to its highest levels since mid-2022, LSEG data shows, as the Middle East conflict chokes supplies.
In the U.S., futures tied to the S&P 500 added 0.3%, while Nasdaq 100 futures gained 0.5%. Dow Jones Industrial Average futures fell 128 points, or 0.2%.
Overnight in the U.S., the Dow Jones Industrial Average closed lower. The 30-stock index fell 280.12 points, or 0.57%, to close at 48,861.81 and notch a fifth straight losing day. The S&P 500 inched down 0.04% to close at 7,135.95, while the Nasdaq Composite crept up 0.04% to 24,673.24.
â CNBC's Sean Conlon and Lisa Kailai Han contributed to this report.
