South Korea’s Kospi jumps more than 3% to lead Asia recovery rally after AI-fueled rout

Asia-Pacific markets traded higher Monday, after artificial intelligence valuation concerns fueled declines in markets across the region last week.

Investors in Asia are also parsing October inflation data from China over the weekend, which came in above expectations.

Headline consumer inflation was at 0.2% year on year, compared to expectations of zero growth from economists polled by Reuters. Wholesale inflation saw a softer-than-expected drop of 2.1% year on year, against the expected 2.2% decline.

South Korea’s Kospi climbed 3.02% and ended at 4,073.24, led by banks and insurance stocks, while the small-cap Kosdaq was 1.32% up at 888.35. Heavyweights on the Kospi index like Samsung Electronics and SK Hynix posted gains of 2.76% and 4.48%, respectively.

Other top gainers also included SK Inc, the holding company of South Korea’s second largest chaebol — or family-run conglomerate — SK Group, which was up about 9.29%. GS Holdings, which is in the energy, retail and construction sectors and also one of the country’s largest chaebols, advanced 11.79%.

Japan’s Nikkei 225 advanced 1.26% and finished at 50,911.76, while the broad-based Topix was up 0.56% to 3,317.42. Yields of 10-year Japanese government bonds inched up to as high as 1.7%, their highest since October.

On Monday, minutes from the Bank of Japan’s October meeting revealed that the BOJ seemed more inclined toward a near-term rate hike, saying that “it is likely that conditions for taking a further step toward the normalization of the policy interest rate have almost been met.”

However, the BOJ also said there were other factors to consider, such as the need to examine to what extent the “underlying inflation rate has become entrenched.”

Hong Kong’s Hang Seng index also joined the recovery rally, up 1.54%, while the CSI 300 on mainland China gained 0.17%.

Australia’s S&P/ASX 200 gained 0.75%, ending at 8,835.9.

India’s Nifty 50 added 0.54%, while the Sensex index was 0.52% higher. On Monday, Softbank-backed Lenskart made a muted debut, with the stock gaining just 1.36% from its IPO price of 402 rupees.

On Friday stateside in the U.S., the Nasdaq Composite continued to fall, but the Dow Jones Industrial Average and S&P 500 inched into positive territory after Senate Minority Leader Chuck Schumer offered up a new plan to Republicans that would enable the record-breaking U.S. government shutdown to end.

A survey from the University of Michigan revealed Friday that consumer sentiment in the country has neared its lowest level ever. The data comes just a day after firm Challenger, Gray & Christmas reported that layoff announcements in October reached their highest level for the month in 22 years.

—CNBC’s Sean Conlon and Pia Singh contributed to this report.