South Korea's KOSPI sank 5.5% on Wednesday as a fresh semiconductor selloff combined with elevated bond yields and rising oil prices to hammer Asian equities. Japan's Nikkei 225 dropped 2.4% in the same session. The Philadelphia Semiconductor Index plunged 5.6% overnight, dragging chipmakers across the region lower.
Asian stocks fell sharply on Wednesday as a renewed semiconductor selloff collided with elevated bond yields and higher oil prices. The MSCI AC Asia Pacific equity gauge fell over 2% after Wall Street's technology-led selloff. Nasdaq 100 Futures slipped 0.2% and S&P 500 Futures lost 0.1% in the same session.
Chip rout deepens overnight
The Philadelphia Semiconductor Index plunged 5.6% overnight, its biggest one-day decline since late July. Micron Technology fell 7% and Nvidia lost 2.3% in the same rout. The pressure is spreading beyond chips.
U.S. long-dated Treasury yields remain near multi-decade highs after the global bond selloff pushed the 30-year yield to 5.3371%, its highest level since 2007. The 10-year Treasury yield was around 4.69% in Asian trade. Rising interest rate costs increase the discount applied to future earnings, making richly valued technology stocks less attractive. Markets will also watch the Federal Reserve's July meeting minutes later Wednesday for clues on how policymakers view persistent inflation, while a lack of progress in the Iran conflict has kept Brent crude above $90 a barrel.
KOSPI plunges as chip rout erases recent rebound
South Korea's KOSPI tumbled 5.5% to 6,495.1 points, after falling as much as 6.4% earlier in the session. The index had gained more than 2% on Tuesday for a sixth straight session, extending its rebound from the late-July rout, but Wednesday's reversal reflects heavy profit-taking as investors reassess AI valuations against higher rates.
SK Hynix plunged 8.4%, while Samsung Electronics fell 7.3%, and the decline briefly triggered a "sidecar" program-trading halt, a mechanism designed to cool markets when selling becomes unusually intense. A BofA survey found that 59% of fund managers are now hedging AI downside risk by rotating toward value, cyclical and defensive sectors, more than double July's level, while almost two-thirds want clearer evidence of AI monetization before adding exposure.
Japan and China tech shares slide
Japan's Nikkei 225 fell 2.4%, while the TOPIX dropped 2.7%. Kioxia led the technology selloff with an 8.9% decline, while TDK fell 4.1% and Sony lost 1.02%.
China's Shanghai Shenzhen CSI 300 fell 2.4%, while the Shanghai Composite lost 2%; Hong Kong's Hang Seng was roughly unchanged. Baidu plunged 12.5% after its quarterly revenue missed estimates on weak advertising demand. Xiaomi rose 6.4% despite a sharp decline in second-quarter adjusted profit, as investors focused on its faster-growing EV and AI businesses, with EV revenue up 15.9%.
Australia's S&P/ASX 200 fell 0.3% and Singapore's FTSE Straits Times lost 0.36%, while India's Nifty 50 opened 0.3% lower. Bank Indonesia held its benchmark rate at 5.75% on Wednesday, in line with expectations.
Source: Investing.com
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