KOSPI

South Korean Shares Close Higher for Fourth Straight Session to Hit New High Despite Middle East Tensions

South Korean shares closed higher on Friday, hitting a new high in the fourth session of straight gains, despite escalated tensions in the Middle East.The Korea Composite Stock Price Index or Kospi increased by 7.95 points, or 0.1%, to end at 7,498. The Kosdaq also added 8.54 points, or 0.7%, to close at 1,207.72.The tension between the U.S. and Iran escalated on Friday after U.S. forces targeted Iranian military facilities that launched attacks against warships passing through the Strait of Hormuz, U.S. Central Command said.The U.S. military said in a statement that U.S. forces do "not seek escalation."Iran's armed forces said the U.S. military's airstrikes on Thursday night hit civilian areas along the coasts of Qeshm Island, Bandar Khamir and Sirik.In economic news, South Korea's current account surplus sharply rose to $37.33 billion in March from $23.19 billion in February, according to preliminary data from the Bank of Korea released Friday.Compared with the year-ago period, the figure rose from a surplus of $9.58 billion, the central bank said.The goods account registered a surplus of $35.07 billion. Exports rose by 56.9% on an annual basis to $94.32 billion, while imports increased 17.4% to $59.24 billion.In corporate news, Coway (KRX:021240) posted first-quarter net income attributable to shareholders of 182.02 billion won, up 31% from 138.9 billion won a year earlier, according to a Friday filing with the Korea Exchange.The South Korean household appliances manufacturer's sales rose 13% year over year to 1.329 trillion won from 1.174 trillion won.Shares of Coway rose nearly 1% at market close.

South Korean Shares Open Lower on Heightened Iran Tension Concerns

South Korean shares opened lower on Friday, as investors held on to their profits after two consecutive days of gains, after energy supply concerns rose again following escalated tensions in the Middle East.The benchmark Korea Composite Stock Price Index, or Kospi, declined by 136.11 points, to open at 7,353.94. The Kosdaq gained marginally to open at 1,199.47.The tension between the U.S. and Iran escalated on Friday after U.S. forces targeted Iranian military facilities that launched attacks against warships passing through the Strait of Hormuz, U.S. Central Command said.The U.S. military said in a statement that U.S. forces do "not seek escalation."Iran's armed forces said the U.S. military's airstrikes on Thursday night hit civilian areas along the coasts of Qeshm Island, Bandar Khamir and Sirik.These renewed tensions sent Brent crude 2.3% higher to over $102 a barrel, as investors were concerned that the Middle East crisis would extend the continued the closure of the Strait of Hormuz.

South Korea's Current Account Surplus Surges in March

South Korea's current account surplus sharply rose to $37.33 billion in March from $23.19 billion in February, according to preliminary data from the Bank of Korea released Friday.Compared with the year-ago period, the figure rose from a surplus of $9.58 billion, the central bank said.The goods account registered a surplus of $35.07 billion. Exports rose by 56.9% on an annual basis to $94.32 billion, while imports increased 17.4% to $59.24 billion.Meanwhile, the services account posted a deficit of $1.29 billion, led by deficits in other business services and manufacturing services accounts.The primary income account recorded a $3.58 billion surplus in the month, owing to higher equity income. The secondary income account incurred a deficit of $300 million, the data showed.

Market Chatter: South Korea Becomes World's Seventh-Largest Stock Market

South Korea became the world's seventh-largest stock market, overtaking Canada, owing to strong demand for AI chips, Bloomberg reported Thursday.The total market value of South Korean listed firms surged 71% to $4.59 trillion in 2026, surpassing Canada's stock market capitalization, which rose about 7% to $4.5 trillion during the period, the report said.Key market bigwigs and chipmakers Samsung Electronics (KRX:005930), which recently surpassed a valuation of $1 trillion, and SK Hynix (KRX:000660), more than doubled in valuation this year as strong demand for AI chips pushed investor appetite for the stocks, it said.Samsung Electronics (KRX:005930) and SK Hynix (KRX:000660) added rose more than 2% and 3%, respectively, at market close.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

South Korean Shares End at Fresh Highs on US-Iran Peace Hopes; SK Biopharma Rises

South Korean stocks closed at a fresh high on Thursday as investor sentiment was buoyed by optimism regarding a potential US-Iran peace agreement.The Korea Composite Stock Price Index or Kospi increased by 105.49 points, or 1.4%, to end at 7,490.05. The Kosdaq slipped 0.9% to close at 1,199.18.The key index was lifted by gains in market heavyweights Samsung Electronics (KRX:005930) and SK Hynix (KRX:000660), which rose more than 2% and 3%, respectively.In economic news, South Korea's foreign reserves grew to $427.9 billion in April from $423.7 billion as of March-end, data from the Bank of Korea showed.In corporate news, SK Biopharmaceuticals (KRX:326030) finished 1% higher after posting a first-quarter attributable income of 105.2 billion won, up 351% from 23.3 billion won a year earlier.

South Korean Banks' Credit Profiles Provide Buffer for More Complex Conditions, Fitch Says

South Korean banks have strong credit profiles and generally steady near-term performance that will help them weather growing complexities in operating conditions, Fitch Ratings said in a recent release.The country's banks face a shifting economic environment, regulatory changes, and an active government policy agenda, especially for vulnerable sectors, Fitch said.Regulatory trends include greater requirements on household lending and policy efforts rerouting credit to the corporate sector, Fitch said.These dynamics have catalyzed strategic alignment within the sector, leading to changes in their attitude toward growth, capital, and risk-taking, the rating agency said.Major commercial banks that have varied business models and controlled risk management will be the most resilient, according to Fitch.

South Korean Shares Open at New High as Investors Remain Hopeful About US-Iran Peace Agreement

South Korean shares opened at a new high on Thursday, extending the 6.5% jump on Wednesday, as investors remained hopeful about the possibility of a peace agreement between the US and Iran.The benchmark Korea Composite Stock Price Index, or Kospi, rose by 114.51 points, or 1.6%, to open at 7,499.07. The Kosdaq gained marginally to open at 1,210.83.After opening at a new high, Kospi rose sharply to a new all-time intraday high at 9.03 am, reaching 7,523.84 points.Iran is expected to deliver its response later today to mediators regarding the US proposal to end the Middle East war, CNN reported, citing a regional source.Earlier, US President Donald Trump said Washington had held "very good talks" with Iran over the past 24 hours, indicating optimism over potential progress in negotiations.

South Korea's Official Foreign Reserves Increase in April

South Korea's foreign reserves grew by $4.2 billion to $427.9 billion in April from $423.7 billion as of the end of March, Bank of Korea data showed on Thursday.The country's official foreign reserves consisted of securities amounting to $384.1 billion, deposits of $18.8 billion, special drawing rights of $15.8 billion, gold worth $4.8 billion, and the country's IMF position at $4.5 billion.South Korea's foreign reserve holdings ranked the 12th largest globally as of the end of March, the central bank said.

Asian Industry Sustains Expansion in April: PMI Report

Despite headwinds from Persian Gulf turmoils, Asia's business sectors largely expanded in April, led by the automobile industry, reported S&P Global on Wednesday."Output growth was recorded across 16 of the 18 monitored Asian sectors in April. This figure was up from 15 in March, as metals & mining production returned to growth," said S&P Global, citing its surveys of regional economies.Showing strength in April was the automotive industry. "Leading the rankings for the first time in nearly two years was the automobiles & auto parts sector. The pace of output expansion in the sector quickened to the steepest since May 2024 and was rapid overall," explained S&P Global.Among the broader categories, consumer products did generally well in April."Consumer goods outperformed the other six tracked areas, with growth also supported by strong and accelerated expansions in output across the beverages & food and household & personal use products segments," added S&P Global.The tech and industrial sectors followed consumer goods on the upside, while the slowest expanding sectors were basic materials, financials and healthcare.In contrast to the general regional expansion, the forestry & paper products and construction materials sectors experienced softening in April, reported S&P Global.However, Asian business managers also reported rising and accelerating costs of operation in April."On the prices front, the latest data indicated that cost burdens rose in 17 of the 18 monitored sectors in April. Notably, the majority of these saw expenses increase at a stronger pace than in March," said S&P Global.Of the 18 monitored industries, only banks and real estate lowered output charges, said the credit-rating agency.The Asia Sector PMI indices were compiled by S&P Global from surveys received from 6,000 Asian private-sector companies.

KOSPI Hits Record High on Hopes of US-Iran Peace Agreement; Samsung Electronics Soars 14%

South Korean shares closed sharply higher on Wednesday, with the primary index shooting up to close at a record high.The rally was led by strong gains in semiconductor stocks and investor optimism for a possible peace agreement between the US and Iran after US President Donald Trump halted the military operation Project Freedom in the Strait of Hormuz.The Korea Composite Stock Price Index or Kospi increased 447.57 points, or 6.5%, to end at 7,384.56. The Kosdaq fell by 3.57 points, or 0.3%, to close at 1,210.17.Chipmakers Samsung Electronics (KRX:005930) and SK Hynix (KRX:000660) added over 14% and nearly 11%, respectively, at market close.The Korea Exchange activated a five-minute buy-side sidecar on the country's primary stock market on Wednesday morning as investors rushed to purchase securities on hopes that the U.S.-Iran conflict may end in the near future.The Korea Exchange announced the order at 9:06 am after the KOSPI200 Futures added 66.05 points, or 6.28%, to trade at 1,116.55.In economic news, South Korea's inflation climbed 2.6% year on year in April, accelerating from a 2.2% rise in March amid the ongoing conflict in the Middle East, data from the country's Ministry of Data and Statistics showed on Wednesday.The headline print was in accordance with the median estimate of 2.6% in a Bloomberg survey.The increase was driven by higher costs across all categories, with transport gaining the highest at 9.7%.Meanwhile, core inflation, which measures prices of goods excluding food and energy, remained steady at 2.2% in April.In corporate news, Samsung Electronics hit a market valuation of $1 trillion on Wednesday, supported by the strong demand for AI chips, Bloomberg News reported on the same day.The South Korean chipmaker became the second Asian firm after Taiwan Semiconductor Manufacturing (TPE:2330) to hit the $1 trillion mark.Overseas investors appear to be driving the recent rally in the stock, supported by a deal between Interactive Brokers and Samsung Securities (KRX:016360) that allows U.S. investors to directly buy South Korean stocks.The firm's semiconductor wing had posted a record profit in the first quarter, surpassing expectations by a wide margin on strong AI data center demand, with analysts expecting the momentum to continue in the quarters ahead as contract prices keep moving higher amid a scarce supply.In other news, LG Electronics (KRX:066570) secured the top 1% rating in credit rating agency S&P Global's Corporate Sustainability Assessment for the third straight year, the electronics products maker said in a Wednesday release.The company secured the highest score of 77 points in the Home Appliances & Leisure Goods industry group, which covers leisure equipment and products and consumer electronics.Shares of LG Electronics jumped over 8% at market close.

South Korea's Inflation Rate Jumps to Two-Year High in April

South Korea's inflation in April climbed to its highest in two years as the Middle East war triggered oil price hikes.The consumer price index or CPI rose 2.6% from a year earlier, the steepest since July 2024, according to Wednesday data from the Ministry of Data and Statistics.The current CPI was in line with the median forecast of analysts surveyed by Reuters.Excluding food and energy, the CPI grew 2.2% year on year.Data from the Bank of Korea showed that the price for oil and petroleum jumped 21.9% in April from 9.9% a month earlier as the war in Iran triggered global oil price shocks over concerns the global crude supply will dwindle due to the closure of the Strait of Hormuz.On the contrary, the prices agricultural, livestock and fishery products slipped 0.5% in April due to increased supply of major agricultural products, the central bank said.Hana Securities economist Chun Kyu-yeon said the government's fuel price caps helped ease inflation pressure. However, service price inflation is expected to increased due to the rise in other transportation fares, such as airfare, Reuters reported Wednesday.The ministry's data showed that the CPI for transportation grew 9.7% year on year.Meanwhile, Daishin Securities economist Kong Dong-rak expects the Bank of Korea to be leaning to a rate hike to mitigate inflationary pressures, according to the Reuters report.On the other hand, Min Joo Kang, ING's senior economist for South Korea and Japan, said a rate hike in July is more probable than one in May at the moment, while a 50-basis-point hike is expected in the second half of the year."With core inflation remaining near 2% and the government working to limit price hikes, the Bank of Korea is likely to pause in May," Kang said. "Strong exports, driven by semiconductors, will support overall growth, but the domestic economy will likely be hit harder by energy price hikes. This K-shaped recovery and widening growth gap between the IT and non-IT sectors should be a key challenge for the BoK."

Korea Exchange Halts Kospi Trading for Five Minutes After Buying Surges on Iran Conflict De-escalation Hopes

The Korea Exchange activated a five-minute buy-side sidecar on the country's primary stock market on Wednesday morning as investors rushed to purchase securities on hopes that the U.S.-Iran conflict may end in the near future.The Korea Exchange announced the order at 9:06 am after the KOSPI200 Futures added 66.05 points, or 6.28%, to trade at 1,116.55.A buy-side sidecar is activated when the KOSPI200 Futures index gains 5% or more for at least one minute.

South Korean Shares Open Higher After Trump Pauses 'Project Freedom' in Strait of Hormuz

South Korean shares opened higher on Wednesday, following the easing of Middle East tensions after US President Donald Trump halted the military operation "Project Freedom," which had escorted ships through the Strait of Hormuz, to reach an agreement with Iran.The benchmark Korea Composite Stock Price Index, or Kospi, rose by 156.02 points, or 2.2%, to open at 7,093.01. The Kosdaq gained 0.6% to open at 1,220.90.Project Freedom had only been in effect since Monday.Several commercial ships were reportedly struck in the United Arab Emirates on Monday, and a UAE oil port caught fire following an Iranian attack, which marked the biggest escalation since a ceasefire was announced four weeks ago. Trump's naval operations in the Hormuz, which were aimed at securing shipping lanes, intensified tensions.In addition, Iraq stepped up diplomatic efforts as tensions rose between Iran and the US, with Prime Minister-designate Ali al-Zaidi saying he spoke with Iranian President Masoud Pezeshkian and offered Baghdad's support for mediation.Iran's Foreign Minister ⁠Abbas Araghchi travelled to Beijing on Tuesday for talks with his Chinese counterpart on the China-Iran relationship, along with regional and global developments, his ministry said.

South Korea's Inflation Accelerates to 2.6% in April

South Korea's inflation climbed 2.6% year on year in April, accelerating from a 2.2% rise in March amid the ongoing conflict in the Middle East, data from the country's Ministry of Data and Statistics showed on Wednesday.The headline print was in accordance with the median estimate of 2.6% in a Bloomberg survey.The increase was driven by higher costs across all categories, with transport gaining the highest at 9.7%, according to the data.Meanwhile, core inflation, which measures prices of goods excluding food and energy, remained steady at 2.2% in April.On a monthly basis, core inflation rose to 0.3% from 0.1% in the preceding month, while headline inflation rose to 0.5% from 0.3%.

South Korea's Inflation Rises to 2.6% in April; Core Inflation Steady at 2.2%

South Korean Shares Close at New High, Lifted by Semiconductor Stocks

South Korean stocks surged more than 5% on Monday to close at a record high, with the Kospi nearing 7,000 points, as strong buying in semiconductor shares boosted the market while investors kept a close eye on developments in the U.S.-Iran peace talks front.The Korea Composite Stock Price Index or Kospi increased 338.12 points, or 5.1%, to end at 6,936.99. The Kosdaq also rose by 21.39 points, or 1.8%, to close at 1,213.74.On Sunday, President Donald Trump said the U.S. would help countries with ships stranded in the Strait of Hormuz. The US military support will comprise guided-missile destroyers, over 100 land and sea-based aircraft, multi-domain unmanned platforms, and 15,000 service members. However, the naval mission is being seen as a violation of the ceasefire by Iran, top Iranian lawmaker Ebrahim Azizi said.In economic news, South Korea's manufacturing sector continued to expand in April, with the seasonally adjusted headline S&P Global South Korea Manufacturing Purchasing Managers' Index increasing to 53.6 last month from 52.6 in March, S&P Global said in a Monday report.A reading above 50 indicates an overall increase compared with the previous month, and below 50 indicates a decline.April's expansion in the country's manufacturing sector was the strongest since February 2022.In corporate news, HD Korea Shipbuilding & Offshore Engineering (KRX:009540) secured an order worth 504.8 billion won for three very large gas carriers from South Korean shipper KSS Shipping.Shares of HD Korea Shipbuilding rose nearly 2% at market close.

Asia Week Ahead: PMI Reports; Central Bank Decisions; and Inflation Prints

For the week ahead in Asia, the economic calendar is packed with S&P Global's monthly purchasing managers' index reports, inflation prints, and central bank decisions across the region.Monday brings a slate of S&P Global manufacturing PMI reports for April, alongside Indonesia's inflation and trade figures.On Tuesday, markets will turn to the Reserve Bank of Australia's interest rate decision, while Thailand and the Philippines release April inflation data.Wednesday features South Korea's April inflation print and New Zealand's first-quarter labor-market report, along with PMI readings from India, China, Hong Kong and Singapore.On Thursday, Malaysia's central bank decision will be in focus, alongside Taiwan's April inflation data and the Philippines' first-quarter GDP report.On Friday, Taiwan's April trade data and Malaysia's March industrial production figures will be due, before China closes out the week with April trade figures on Saturday.Here's what to watch in the week ahead.MONDAY, May 4The week kicked off with a slate of S&P Global purchasing managers' index reports covering manufacturing activity during April.Most economies in the region saw a rise in output despite the ongoing conflict in the Middle East which has pushed oil prices upwards.Malaysia's manufacturing sector expanded at its fastest pace in four years in April, supported by stronger output and a return to growth in new orders.The S&P Global Malaysia Manufacturing Purchasing Managers' Index rose to 51.6 in April from 50.7 in March, marking a second straight month of expansion.Output grew at the fastest pace since December 2021, while new orders increased as firms and clients built safety stocks amid uncertainty linked to the Middle East war.Output activity also expanded in South Korea, India, and Taiwan, according to S&P Global.Meanwhile, Vietnam's manufacturing sector also expanded, albeit at a slower pace.The S&P Global Vietnam Manufacturing PMI slipped to 50.5 in April from 51.2 in March, a seven-month low, signalling a tenth straight month of expansion but only marginal growth.In contrast, Indonesia's manufacturing sector slipped into contraction in April as cost pressures intensified due to material shortages and delays linked to the Middle East conflict.The S&P Global Indonesia Manufacturing Purchasing Managers' Index fell to 49.1 in April from 50.1 in March, dropping below the 50 mark for the first time in nine months.Manufacturing activity similarly slipped in the Philippines as new orders fell sharply and cost pressures intensified.Indonesia released inflation figures, noting a 2.4% year on year rise in prices during April -- slower than the 3.5% recorded a month prior.The island state also booked a trade surplus of $5.55 billion in the first quarter, supported by a strong non-oil and gas balance despite higher import growth, according to official data released by Statistics Indonesia.The Melbourne Institute released its monthly inflation gauge, noting another increase in April, mainly driven by higher recreation-related prices. The monthly cost of living also increased in April, especially for employees and self-funded retirees.TUESDAY, May 5An interest rate decision in Australia will capture headlines on Tuesday.The Reserve Bank of Australia is likely to rate hikes by 25 basis points to 4.35% as persistent inflation pressures and rising fuel costs linked to Middle East supply disruptions keeps the central bank on a hawkish path even as global peers hold steady.Thailand and the Philippines will release inflation data for April.Economists at ING said they expect the Philippines' headline inflation to rise above 5% as the government passes on the impact of higher global oil prices onto consumers. The Philippines' inflation climbed to 4.1% in March.Thailand is similarly expected to see a rise in consumer prices during April. According to a consensus compiled by Trading Economics, headline inflation could clock in at 1.7% on an annual basis, compared with a 0.08% decline in March.First-quarter gross domestic growth data will be due in Indonesia. DBS said it was forecasting 5.6% growth for the quarter thanks to government spending and festive spending during the period, the Wall Street Journal reported.Hong Kong will similarly release its first-quarter advance GDP growth estimate on Tuesday.Meanwhile, March retail sales figures will be expected in Singapore.On the activity front, S&P Global will release PMI reports manufacturing activity in Thailand and services and composite activity in Australia.WEDNESDAY, May 6Another inflation print, this time in South Korea.Economists at ING said they expect consumer prices to rise at a faster pace in April despite attempts by Seoul to rein in the impact of rising oil costs on consumers. A consensus compiled by Trading Economics indicated headline inflation could clock in at 2.6%.In March, South Korea's annual inflation rose to 2.2%, breaching the central bank's 2% target.First-quarter labor data from New Zealand will also be in the news.CommBank expects headline labor-market figures to remain weak, forecasting just 0.1% quarterly employment growth and a rise in unemployment to 5.5%, compared with Trading Economics consensus estimates of 0.3% employment growth and a 5.4% jobless rate for the first quarter."We do not envisage a labor market recovery until 2027, reflective of adverse impacts from geopolitical ructions," CommBank said in a preview.The Philippines will similarly release labor data for March, as well as industrial production figures.ING said it expects unemployment to edge higher. "On the industry side, weak soft construction activity should continue to weigh on growth," ING said.Additional S&P Global PMI reports covering services and composite activity in India and China, as well as overall activity in Hong Kong and Singapore, will be due.A business confidence report will be due in Thailand, while Hong Kong's March retail sales figures will also be on display.THURSDAY, May 7Malaysia's central bank will meet for its interest rate decision, with no change expected in the 2.75% policy rate.RHB Bank said it expects Bank Negara Malaysia to hold rates as growth remains steady and inflation remains in check, the Wall Street Journal reported.Taiwan's April inflation print will be due, with analysts looking for signs on how the Iran war was weighing in on prices. ING said it expects to see inflationary pressure picking up after limited pass through of energy prices in March.Australia will release March trade figures. The country's trade surplus could fall to A$4.45 billion from the A$5.69 billion recorded in the month prior, according to a consensus compiled by Trading Economics.CommBank said it expects the goods trade balance to decline due to rising fuel imports in the wake of the Iran conflict.The Philippines' first-quarter GDP growth figures will be expected. ING said the Philippines' economy could recover to a growth of 4.3% year on year thanks to favorable base effects and some pick-up in government spending.The Philippines' economy grew by 3% last quarter.Another confidence report covering consumer sentiment will be due in Thailand.FRIDAY, May 8Markets will be on the lookout for Taiwan's trade data for April.ING said it expects the island state's trade surplus to rise to $21.6 billion from $21.3 billion in the month prior. "We're looking for another strong month, with 59.3% YoY export growth and 35.5% import growth," ING said in a preview.In Malaysia, March industrial production figures will be due.S&P Global will release PMI reports covering services and composite activity in Japan.SATURDAY, May 9China will release its April trade data on Saturday.The world's second largest economy could record a surplus of $82.4 billion for the month, rising from $51.13 billion in March, according to a consensus compiled by Trading Economics.Analysts at DBS expect a sharp uptick in surplus, with export growth more than doubling to 8.4% from the 2.5% rise seen in March, the WSJ reported.

Market Chatter: Bank of Korea Deputy Chief Says Time to Consider Rate Hike

Bank of Korea's senior deputy governor Sang-dai said Sunday that it was time to stop rate cuts and start thinking about rate hikes, taking into account persistent inflationary pressures despite measures such as nationwide fuel price caps, Reuters reported Monday.Since April, expectations suggest economic growth will remain close to 2%, while inflation is likely to surpass 2.2%, Ryoo said, backing his claim for rate hikes ahead.In April, the South Korean central bank kept interest rates steady amid increasing uncertainty from Middle East tensions and its possible effect on growth and inflation. Ryoo's remarks followed the country recording its fastest growth in nearly six years in the first quarter, driven by better-than-expected chip exports, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

South Korea's Manufacturing Sector Continues to Expand in April

South Korea's manufacturing sector continued to expand in April, with the seasonally adjusted headline S&P Global South Korea Manufacturing Purchasing Managers' Index increasing to 53.6 last month from 52.6 in March, S&P Global said in a Monday report.A reading above 50 indicates an overall increase compared with the previous month, and below 50 indicates a decline.April's expansion in the country's manufacturing sector was the strongest since February 2022.The ongoing tensions in the Middle East took a toll on manufacturing, with higher cost burdens being prevalent from the beginning of the second quarter. A surge in oil and fuel prices translated to higher raw material prices, which increased costs for end customers. Delivery delays and supply shortages were rampant during the month.In addition, average lead times for input deliveries also increased to the greatest extent since June 2022, due to higher raw material prices.Looking ahead, optimism was at its lowest in five months, amid the uncertainty over the length of the Middle East conflict and its effect on the supply chain and prices.

ADB Pledges $70 Billion For Energy, Digital Networks Across APAC as Middle East Conflict Batters Outlook

The Asian Development Bank is committing $70 billion to support new energy and digital infrastructure initiatives across the Asia-Pacific region by 2035.ADB President Masato Kanda announced the pledge on Sunday during the lender's annual meeting in Uzbekistan."Energy and digital access will define the region's future," said Kanda. "These two initiatives build the systems Asia and the Pacific need to grow, compete, and connect. By linking power grids and digital networks across borders, we can lower costs, expand opportunity, and bring reliable power and digital access to hundreds of millions of people."The pledge comes as the ADB sharply downgraded its forecast for the APAC region, citing energy disruptions from the ongoing Middle East conflict.On Wednesday, the ADB slashed its GDP growth outlook for developing Asia and the Pacific to 4.7% in 2026 from the previous 5.1% forecast.Inflation for 2026 is projected to accelerate to 5.2% in 2026 from 3% in 2025, before easing to 4.1% in 2027."Our revised outlook is a significant downward revision for growth and a sharp increase in inflation following a special update to reflect the deepening crisis," Kanda said at the time.The bank's new outlook assumes that oil prices average around $96 a barrel in 2026, well above the $69 per barrel average in January and February before the Middle East conflict. The bank expects oil prices to ease to around $80 per barrel in 2027."We are confronting systemic, long-lasting disruptions to global energy and trade networks, not just temporary volatility. ADB will remain an agile partner in protecting the region's economy; tracking fast-moving risks, and moving with urgency to scale up our support," Kanda added.Diesel prices across several Southeast Asian countries have increased by more than 100% since late February, the ADB said in its updated outlook report.The ADB also noted in its Wednesday report that the energy shock is also affecting fertilizer prices, which it said could add to food inflation, particularly for economies most dependent on Middle East imports.Against that backdrop, the ADB is committing $70 billion to build new energy and digital infrastructure in Asia and the Pacific by 2035.The largest investment, worth $50 billion, will be allocated towards cross-border power infrastructure to unlock renewable energy at scale, the ADB said.The project will focus on transmission and grid integration, including cross-border lines, substations, storage, and grid digitalization, according to the lender.By 2035, the bank aims to integrate about 20 gigawatts of renewable energy across borders, connect 22,000 circuit-kilometers of transmission lines, and cut regional power sector emissions by 15%, while improving energy access for around 200 million people.The remaining $20 billion will fund the Asia-Pacific Digital Highway, targeting digital corridors, data infrastructure, and AI-ready economies.The project aims to bring first-time broadband access to 200 million people and cut connectivity costs in remote and landlocked areas by about 40%.The South Korean government will back a new Center for AI Innovation and Development in Seoul with a $20 million contribution. The center will aim to train about 3 million people in digital and AI-related skills by 2035.Separately on Sunday, the ADB also unveiled a Critical Minerals-to-Manufacturing Financing Partnership Facility designed to help the region move beyond mining into higher-value industries such as processing, manufacturing, and recycling.Japan committed $20 million to the grant window, the UK contributed $1.6 million, and the Korea Eximbank and the Korean Trade Insurance Corporation each signed $500 million memorandums as the facility's first partners.