Key facts
- Asian stock markets mostly declined on Thursday, driven by a sell-off in chip shares.
- South Korea's Kospi index fell 5.1%, with major chipmakers SK Hynix and Samsung Electronics experiencing significant drops.
- Japan's Nikkei 225 lost 1.5%, and Taiwan's Taiex declined 1.1%, with chip equipment maker Tokyo Electron and TSMC falling.
- U.S. chip stocks also saw declines on Wednesday, including Micron Technology, Intel, AMD, Broadcom, and Nvidia.
- Oil prices fell as traders eyed potential de-escalation in the Iran conflict and improved supply prospects.
- Hong Kong's Hang Seng bucked the trend, rising 0.8% on strong sales from Chinese EV maker BYD.
Asian stock markets mostly declined on Thursday, with heavy selling in computer chip shares weighing on investor sentiment. South Korea's benchmark Kospi index sank 5.1%, with chip-related shares like SK Hynix and Samsung Electronics trading lower. Tokyo's Nikkei 225 lost 1.5%, and Taiwan's Taiex declined 1.1%, impacted by drops in chip equipment maker Tokyo Electron and chipmaking giant TSMC.
Concerns over a potential glut in supply, despite massive investments by Big Tech in AI, have clouded sentiment. Economists Megan Fisher and Vicky Redwood of Capital Economics noted that while AI demand may continue to grow, it could be at a slower pace than expected, and firms might be underestimating AI adoption barriers.
In contrast, Hong Kong's Hang Seng index rose 0.8%, boosted by an 8.7% surge in shares of Chinese electric vehicle maker BYD after it reported a second consecutive month of sales increases. The Shanghai Composite index, however, fell 0.9%.
Australia's S&P/ASX 200 edged 0.1% lower, while India's Sensex climbed 0.5%. U.S. chip stocks also experienced declines on Wednesday, with Micron Technology, Intel, AMD, Broadcom, and Nvidia all falling. The S&P 500, Dow Jones Industrial Average, and Nasdaq composite saw modest losses.
Oil prices fell early Thursday, trading below pre-war levels, as traders eyed developments in achieving a permanent end to the conflict in Iran. Hopes for improved crude supplies were also a factor, with Brent crude and U.S. benchmark crude prices declining. The U.S. dollar traded lower against the Japanese yen, while the euro saw a slight increase against the dollar.