Asian markets mostly experienced a heavy decline on Tuesday, and shares from the semiconductor sector were primarily responsible for this.
In Asia, South Korea’s Kospi fell 10%, dragged down by declines in index heavyweights Samsung and SK Hynix. The Japanese Nikkei 225 fell by 4%, and the Topix by 2.42%. Australia’s benchmark S&P/ASX 200 was 0.43% higher.
Semiconductor stocks in Asia fell on Tuesday, extending chipmakers’ slide after another weak session on Wall Street. SK Hynix fell more than 11%, while Samsung Electronics fell more than 9%. Other AI-related names also saw heavy selling, with Samsung SDI down more than 8% and Seoul Semiconductor down around 7%.
Japan’s semiconductor sector was also trading lower. Tokyo Electron fell more than 10%, Advantest fell 10.25%, while SoftBank Group, a major AI investment broker through its Arma stake, fell 6%. Shares of Japanese computer memory maker Kioxia fell by more than 17%. Taiwan’s TSMC fell more than 2%.
The market tension reflects uncertainty ahead of a big session for stocks with earnings results from Amazon, Meta Platforms and Microsoft on the calendar. The chip trade depends on the continued consumption of hyperscalers – even as the mega-cap firms themselves stumble. Apple is also reporting this week, SEEbiz reports.
“This week we’re going to hear from all the hyperscalers that are going to add more capex. So those stocks could be under pressure,” Stephanie Link, chief investment strategist at Hightower, told CNBC’s “Closing Bell” on Monday. “That’s good as long as the hyperscalers spend. It helps our economy.”
The Federal Reserve’s interest rate decision is due on Wednesday. Investors expect the central bank to remain on hold but will seek more clarity on the way forward for monetary policy. Fed funds futures contracts last rose by a quarter point in September, according to the CME FedWatch Tool.
