|
Neubauer Artists LLC
Getting your Trinity Audio player ready...
|
SEOUL/TOKYO — Asian stocks fell sharply on Tuesday morning after U.S. tech stocks dropped overnight and tensions rose in the Middle East.
South Korea led the retreat, with the country’s benchmark KOSPI index plummeting more than 7% at one point in the morning, after falling 3.7% the previous day. Samsung Electronics, the world’s biggest memory chipmaker, dropped 8.9% at one point despite its stellar earnings guidance last week; rival SK Hynix plummeted 9.7%.
In Japan, the benchmark Nikkei Stock Average was down over 2.5% after a three-day weekend, dropping for the fourth consecutive trading day as tech-related stocks were sold. At one point, shares of memory maker Kioxia Holdings dropped 13.3%, electronics parts manufacturer TDK lost 6.9% and equipment maker Advantest declined 7.8.
New York’s tech sell-off sparked an Asian tantrum, with memory and storage companies losing big. Micron Technologies closed down 3.9%, while SanDisk plunged almost 6% on news that Chinese memory chip giant ChangXin Memory Technologies (CXMT) has reported advances in developing a new cell architecture to boost memory density.
According to South China Morning Post, CXMT President Cao Kanyu reported “key progress” on a new cell architecture at an industrial event in Shanghai over the weekend, and plans to roll out new memory products based on the structure by the end of the year. Rivals like Samsung and SK Hynix are working on similar innovations.
Intensifying Middle East tensions also weighed on markets in South Korea and Japan, Asia’s key energy importers. Geopolitical risks escalated following recent tanker attacks in key shipping lanes like the Strait of Hormuz and Houthi strikes in Saudi Arabia, pushing Brent crude past $106 a barrel. This renewed surge in oil prices has heightened anxiety over energy supply stability and mounting cost pressures for resource-dependent Asian economies.
Global investment banks, meanwhile, say artificial intelligence will continue to play a key role in Asia’s stock markets, raising hopes for mid- and long-term rebounds for chips.
“Price action in Asia in 2026 can be characterized at the highest level as AI vs non-AI — with lesser differentiation between other sectors/markets,” JPMorgan said in a report on Sunday. “We expect this pattern to carry through into 2027, with the outcome for AI stocks determining not only allocation alpha but also overall market beta.”
By using the words alpha and beta, JPMorgan is saying AI stocks will play a large part in driving investor returns and in determining Asian markets’ overall performance.
“AI exposure in Asia is primarily in the hardware layer,” the report goes on, “both in the global/U.S. ecosystem (Taiwan, Korea and some China) and the China ecosystem, with the vast majority of the earnings dependency and index weight in the former.”
