Asian equitiesare closing February on a historic high, powered by relentless investor appetite for companies supplying the backbone of the global artificial intelligence build-out, according to Bloomberg.
The MSCI Asia Pacific Index has climbed 6.7% this month, marking its strongest February performance since the gauge was launched in 1998, Bloomberg reported. The index edged up 0.1% on Friday and is on track to outperform the S&P 500 Index for a third straight month, even as equity-index futures signalled a softer open for Wall Street, according to Bloomberg data.
South Korea Leads the Charge
South Korea has emerged as the standout market, underscoring its role as a bellwether for AI-linked investments, Bloomberg noted. The Kospi Index has surged about 20% in February alone, making it the world’s best-performing major equity gauge this year after a 49% rally year-to-date, according to Bloomberg figures.
The rally reflects heavy investor inflows into semiconductor, chip equipment and advanced manufacturing companies central to AI infrastructure expansion. Bloomberg said investors increasingly view Asian firms as the “picks and shovels” of the AI revolution — supplying semiconductors, memory, high-performance components and precision manufacturing equipment.
In contrast, US equities have faced bouts of volatility as the disruptive implications of AI unsettled several sectors in what market participants have called the “AI scare trade,” Bloomberg reported.
Emerging Markets Regain Momentum
The bullish tone extends beyond equities. Citigroup Inc., after reviewing published outlooks from some of the world’s largest asset managers, found that funds overseeing more than $20 trillion have added to long positions across emerging-market equities, currencies, domestic bonds and credit, Bloomberg reported.
The findings come as MSCI Inc.’s main emerging-market equity benchmark trades close to record highs, according to Bloomberg data, reinforcing signs of renewed global capital flows into growth-oriented regions.
Asian equities have outpaced European and US benchmarks as investors rotated toward companies underpinning the expansion of AI infrastructure, Bloomberg said, viewing the region’s firms as essential suppliers within the global technology supply chain.
Outlook for March
After a record-setting February, markets may enter the next month with strong momentum, though risks remain.
Base Case:
If AI-related earnings continue to validate elevated demand for chips and data-centre infrastructure, Asian benchmarks could extend gains into March. Stable US bond yields and steady global liquidity conditions would further support capital flows into emerging markets.
Consolidation Risk:
Given the sharp 20% monthly surge in the Kospi, some profit-taking cannot be ruled out. A pause would be healthy after such outsized gains.
Macro Watch:
Investors will closely track US inflation data and Federal Reserve commentary. Any unexpected rise in Treasury yields could temper risk appetite and slow inflows into Asia.
Geopolitical Sensitivity:
Technology export controls or trade tensions remain a wildcard for semiconductor-heavy markets.
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Overall, the AI infrastructure theme continues to anchor investor optimism in Asia. Whether March delivers follow-through or consolidation may depend less on enthusiasm and more on earnings validation and global rate stability.
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