South Korea and Asia ride AI chip cycle; India and EM lag on oil pressure

Emerging-market equities are delivering a K-shaped performance as geopolitical and energy shocks split winners from losers. South Korea's KOSPI reached record highs on JPMorgan's bullish stance and a memory chip boom, with SK Hynix opening up 9% and semiconductor-heavy index weightings driving strength. Taiwan and Asia-Pacific tech exporters are similarly outperforming, betting on AI capex tails extending to regional chip supply chains. Meanwhile, India's Nifty and Bank Nifty indices fell 1% to 1.2% amid oil concerns and rupee depreciation, as Modi's appeal for reduced gold purchases and fuel conservation reflected genuine economic anxiety over Hormuz closure and forex depletion.

The divergence reflects structural differences. Oil importers like India, Indonesia, Turkey, and the Philippines are facing margin compression and currency pressure; the Philippine peso is likely to hit new lows despite rate hike expectations. Indonesia's central bank bills outstanding climbed to two-year highs as authorities try to attract capital inflows. Conversely, tech exporters and memory-dependent Korea benefit from a secular AI story that overshadows near-term energy headwinds. Reliance Industries, despite being India's largest conglomerate, is planning an all-new-shares Jio IPOInitial Public Offering - a company's first public sale of stock. (potentially the nation's largest ever), but the geopolitical backdrop has dimmed euphoria. BYD's annual sales outlook remains bullish on China and global expansion, yet China's April auto sales collapsed 21.5% as gasoline vehicle demand plunged due to the oil shock.

Foreign investors now hold a record $21.3 trillion in US equities (63% of the market), the highest share since the dot-com bubble, which invites vulnerability to any rotational sell-off toward EM. However, near-term flows favor momentumThe empirical fact that winners keep winning over the medium term.: Asia-linked ETFs and South Korean equities are stealing AI mania from broad indices. The narrative split between AI winners (Korea, Taiwan, US) and energy-shock losers (India, EM FX) is likely to persist until either Hormuz resolves or oil prices normalize.