Key Takeaways
- • South Korea's Kospi fell 7.6% to 5,554.22, down more than 16% over the past month and well below the 9,000 level it crossed in June at its all-time high, according to the Associated Press.
- • Japan's Nikkei 225 tumbled 4.9% to 64,425.95, with SoftBank Group down 9.3%, Tokyo Electron down 7.8% and Kioxia Holdings down 12.3%.
- • Samsung Electronics slid 9.5% and SK Hynix plunged 11.1% in Seoul, while Taiwan's Taiex fell 3.4% despite TSMC posting another record quarterly profit.
- • U.S. tech futures pointed lower, with Nasdaq futures down 1%, after CoreWeave, GE Vernova and Oracle led a second day of AI-stock losses on inflation and higher bond-yield concerns.
- • Morningstar's Lorraine Tan warned that any risk to perceived AI spending growth could slow demand for chips and equipment in tech-weighted markets such as Korea and Taiwan.
Summary
A deepened sell-off in technology shares pulled Asian equities lower on Thursday, with South Korea and Japan leading losses, according to The Associated Press. South Korea's benchmark Kospi index lost 7.6% to 5,554.22. The index has fallen more than 16% over the past month and sits well below the 9,000 level it crossed in June at an all-time high, driven by optimism over the global artificial intelligence boom. Samsung Electronics slid 9.5% and memory chipmaker SK Hynix plunged 11.1%.
Japan's Nikkei 225 tumbled 4.9% to 64,425.95. OpenAI investor SoftBank Group lost 9.3%, chip equipment maker Tokyo Electron dropped 7.8% and memory chipmaker Kioxia Holdings fell 12.3%. Taiwan's Taiex, which also benefited from the AI boom, declined 3.4%. Taiwan Semiconductor Manufacturing Co. (TSMC) dropped 2% ahead of its earnings report, even though it reported a record profit for the latest quarter that beat analyst expectations and said AI demand remains very strong. Hong Kong's Hang Seng fell 1% to 24,062.72 and the Shanghai Composite slipped 1.6% to 3,707.48. Australia's S&P/ASX 200 edged down 0.1%.
The declines followed a second day of pressure on U.S. AI-linked stocks. Before the U.S. open, Nasdaq futures fell 1% and S&P 500 futures slipped 0.2%. CoreWeave fell further after a 15.5% drop the previous day, GE Vernova declined after a 6.2% fall, and Oracle sank after losing nearly 9% in the prior session. Inflation remains well above the Federal Reserve's 2% target, raising the prospect of another interest-rate hike before year-end. Yields on 10-year Treasuries eased to 5.09% from 5.32% but remain elevated, which could make it harder for companies to finance data-center construction. The producer price index report was due Thursday alongside a further batch of corporate earnings.
Morningstar's Lorraine Tan, director of equity research for Asia, said heavily technology-weighted markets such as Korea and Taiwan, and to a lesser extent Japan, are exposed if perceived AI spending growth slows, which could reduce demand for chips and equipment. She described the key issue as a possible mismatch between market growth expectations for the tech sector and actual outcomes. Brent crude fell more than 1% to $104.91 per barrel, still elevated compared with roughly $72 before the Iran war began in late February.
Japan's Nikkei 225 tumbled 4.9% to 64,425.95. OpenAI investor SoftBank Group lost 9.3%, chip equipment maker Tokyo Electron dropped 7.8% and memory chipmaker Kioxia Holdings fell 12.3%. Taiwan's Taiex, which also benefited from the AI boom, declined 3.4%. Taiwan Semiconductor Manufacturing Co. (TSMC) dropped 2% ahead of its earnings report, even though it reported a record profit for the latest quarter that beat analyst expectations and said AI demand remains very strong. Hong Kong's Hang Seng fell 1% to 24,062.72 and the Shanghai Composite slipped 1.6% to 3,707.48. Australia's S&P/ASX 200 edged down 0.1%.
The declines followed a second day of pressure on U.S. AI-linked stocks. Before the U.S. open, Nasdaq futures fell 1% and S&P 500 futures slipped 0.2%. CoreWeave fell further after a 15.5% drop the previous day, GE Vernova declined after a 6.2% fall, and Oracle sank after losing nearly 9% in the prior session. Inflation remains well above the Federal Reserve's 2% target, raising the prospect of another interest-rate hike before year-end. Yields on 10-year Treasuries eased to 5.09% from 5.32% but remain elevated, which could make it harder for companies to finance data-center construction. The producer price index report was due Thursday alongside a further batch of corporate earnings.
Morningstar's Lorraine Tan, director of equity research for Asia, said heavily technology-weighted markets such as Korea and Taiwan, and to a lesser extent Japan, are exposed if perceived AI spending growth slows, which could reduce demand for chips and equipment. She described the key issue as a possible mismatch between market growth expectations for the tech sector and actual outcomes. Brent crude fell more than 1% to $104.91 per barrel, still elevated compared with roughly $72 before the Iran war began in late February.
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