Asian equities surged on Thursday, driven by renewed hopes for US interest rate cuts following unexpectedly weak private sector jobs data. The rally, led by tech firms, overshadowed concerns over a partial US government shutdown and continued political gridlock in Washington.

Markets were buoyed by a report from payrolls firm ADP, which showed US private employers shed 32,000 jobs in the past month, sharply contrasting with forecasts for a gain of 50,000. The data signaled further softening in the US labour market and added to expectations that the Federal Reserve may cut interest rates twice more before the end of 2025.

With the key non-farm payrolls report potentially delayed due to the US government shutdown, investors are turning to private data sources to gauge the state of the economy.

“The market is going to have to focus on independent private sources to get a sense of what’s going on,” said Brij Khurana of Wellington Management.
“If the administration does go forward with cutting headcount, there is potential for this to have an economic impact and probably more so than what we’re used to.”

Economists at Bank of America noted further risks to labour demand, citing job losses in goods-producing sectors due to tariff uncertainty and ongoing layoffs in professional services, where AI adoption is accelerating.

AI fuels tech rally across Asia

Tech stocks led the market charge after Samsung and SK hynix, South Korea’s two largest chipmakers, announced preliminary agreements with OpenAI to support its Stargate AI infrastructure project. The deals were signed during a visit to Seoul by OpenAI CEO Sam Altman.

SK hynix surged nearly 12%

Samsung Electronics gained around 5%

South Korea’s Kospi index jumped over 3% to a record high

Taiwan’s TSMC, a major chip supplier to AI firms, climbed 3%, helping lift the TAIEX index by nearly 2%.

Hong Kong also saw strong gains, with the Hang Seng Index rising 1.7% as investors returned from a public holiday. Tech giants Alibaba, Tencent, and JD.com all gained between 2% and 3%.

Tech companies have been the main drivers of global equity markets this year, amid an AI investment boom that has drawn hundreds of billions of dollars into the sector.

Global market snapshot (as of 0230 GMT)

Tokyo - Nikkei 225: UP 0.3% at 44,675.96

Hong Kong - Hang Seng Index: UP 1.7% at 27,304.94

Shanghai: Closed for a holiday

Seoul - Kospi: UP 3.1% (record high)

Taipei - TAIEX: UP nearly 2%

Currencies

Euro/dollar: UP at $1.1739 (from $1.1728)

Pound/dollar: UP at $1.3483 (from $1.3476)

Dollar/yen: DOWN at 147.02 yen (from 147.14 yen)

Euro/pound: UP at 87.07 pence (from 87.04 pence)

Commodities

WTI crude: UP 0.5% at $62.10 per barrel

Brent crude: UP 0.5% at $65.70 per barrel

Wall Street & Europe (Wednesday close)

Dow Jones: UP 0.1% at 46,441.10

S&P 500 and Nasdaq: Closed at record highs

London FTSE 100: UP 1.0% at 9,446.43

While concerns remain over political gridlock in the US and broader geopolitical risks, investors are betting on an improving outlook for tech and more dovish moves by central banks in the coming months.