Asian markets showed a clear divergence on Wednesday, with South Korea's KOSPI extending its slide while Japan's Nikkei 225 remained near the 70,700 level. The contrasting moves highlight how two chip-heavy regional indexes are absorbing similar external pressures—elevated US Treasury yields, firm oil prices, and stretched valuations in AI-related stocks.
The KOSPI fell 1.16% to 6,860.73 by mid-morning in Seoul, as foreign investors offloaded a net 1.16 trillion won of shares, with domestic institutions also turning net sellers. The selling pressure was concentrated in the very names that powered the first half of the year's AI rally: SK Hynix dropped 2.09% and Samsung Electronics slipped 0.28%.
The won weakened to 1,341.35 per dollar, another sign that overseas investors remain cautious about Korean assets. Samsung's preliminary third-quarter results, due Thursday, are now a critical test. Analysts expect a sharp year-on-year profit increase, but the market is increasingly focused on whether memory margins have peaked and whether high-bandwidth memory (HBM) pricing can stay strong.
Goldman Sachs analyst Heather Oh, in a report cited by Maeil Business Newspaper, warned that Samsung could face extra volatility around the earnings release because ETF rebalancing, options expiry, and the end of its share buyback programme are converging. She also noted that a return of foreign buying would be important for a more durable recovery.
Japan's Nikkei, by contrast, was roughly flat at 70,685.22 after closing above 70,000 on Tuesday, while the broader Topix rose 0.4%. Gains in machinery and industrial names—Hitachi up 2.4% and Mitsubishi Heavy Industries up 2.5%—offset losses in financial shares such as Resona Holdings. The yen remained weak near 158.4 per dollar, still providing some support to exporters.
But the bigger question in Tokyo is valuation. Business Insider Japan cited Rakuten Securities senior market analyst Masayuki Doshida as warning that higher interest rates reduce the earnings multiple investors are willing to pay. His estimates suggest the Nikkei's move back above 70,000 leaves less room for further multiple expansion unless earnings forecasts rise again. That tension is becoming more important as Japan's 10-year government bond yield remains around 3%, far above levels investors were accustomed to during the earlier rally.
The broader regional backdrop was softer. MSCI's Asia-Pacific index outside Japan fell about 0.3%, Hong Kong's Hang Seng lost around 0.6%, and Australian shares were little changed. Mainland Chinese markets remained closed for holidays.
Oil prices firmed, with Brent rising about 1% to $101.65 a barrel and WTI climbing to $90.38, as traders weighed a Gulf of Mexico storm and renewed Houthi-Saudi tensions against improving Middle East exports. US Treasury yields remain the bigger cross-market constraint, with the 10-year yield around 5.31% and the 30-year near 5.67%, keeping discount-rate pressure on expensive technology shares. Fed minutes due later Wednesday could shift expectations again.
This article is for informational purposes only and does not constitute financial advice.
