Asian equities extended their recent slide on Tuesday, with South Korea's KOSPI and Japan's Nikkei 225 both declining sharply, even as U.S. technology shares rebounded overnight. The moves underscore persistent investor unease about the sustainability of the artificial intelligence trade ahead of a heavy week of corporate earnings.
The KOSPI fell 2.36% to 5,631.95 by mid-morning in Seoul, after touching an intraday low of 5,493.24. Japan's Nikkei 225 lost about 0.6% to 64,512 at its midday break. The declines came despite a 1.11% gain in the Nasdaq and a 1.61% advance in the Philadelphia Semiconductor Index on Monday, suggesting that bargain hunting on Wall Street has not yet restored confidence in Asian tech valuations.
Foreign investors resume selling Korean chipmakers
South Korea's market was dragged down by renewed foreign selling, a day after the KOSPI rebounded 1.76%. By 10:30 a.m., overseas funds had offloaded 605.8 billion won of shares, while domestic institutions sold 470.7 billion won. Retail investors bought 832.1 billion won, but that was insufficient to stem the decline.
SK Hynix lost 3.6% and Samsung Electronics dropped 1.5% at that snapshot, even after paring steeper early losses. The selling pressure was compounded by concerns over a potential U.S. listing of SK Hynix's Solidigm memory subsidiary. Investors worry that a separate valuation could divert capital or dilute the appeal of the Korean-listed parent, although no transaction has been confirmed.
The weakness extended beyond chips. Data-center operator Elice opened below its initial public offering price, highlighting the tougher financing environment for AI infrastructure projects.
Kiwoom Securities analyst Han Ji-young said a sustained KOSPI recovery would require the benchmark to reclaim its 200-day moving average near 6,410, a demanding hurdle after this month's steep losses.
Nikkei pressured by SoftBank and AI funding doubts
Japan's losses were less severe, but the pressure points were familiar. SoftBank Group fell about 3.3% early in the session, while cable maker Fujikura lost 3.4% and memory producer Kioxia also weakened.
The Nikkei has become particularly sensitive to the financing of AI capacity, not merely demand for chips. SoftBank represents the investment side of that cycle, while Japanese equipment and component suppliers depend on customers maintaining ambitious spending plans.
Nomura analysts argued that markets may be underestimating AI profitability because infrastructure spending comes well before revenues mature. Established cloud businesses remain profitable, they said, even as losses at smaller AI operators unsettle investors.
Oil, European risks, and earnings keep Asia on edge
The broader Asian landscape remained fragile. The MSCI Asia-Pacific index excluding Japan fell 0.93%, while Hong Kong's Hang Seng lost about 1% and Australia's ASX 200 declined 0.8%. Mainland China's Shanghai Composite was roughly unchanged.
Brent crude traded close to $110 a barrel, sustaining inflation and borrowing-cost concerns despite Washington's move to ease some Russian energy restrictions. Political unrest in France also weighed on European sentiment, with Euro Stoxx 50 futures falling 0.71%, DAX futures slipping 0.4%, and FTSE futures losing 0.44%. U.S. S&P 500 futures were broadly flat.
This article is for informational purposes only and does not constitute financial advice.
