Market Overview

Most Asian equity markets traded lower on Wednesday as investors grew cautious on artificial‑intelligence‑linked shares after a valuation‑driven semiconductor sell‑off and amid rising oil prices. The Nasdaq 100 futures rose 0.4% and S&P 500 futures gained 0.1% in Asian trade, while Wall Street closed lower overnight.

AI‑linked Semiconductor Valuation Concerns

Samsung Electronics Co Ltd (KS:005930) reported blockbuster earnings, which paradoxically triggered a broad sell‑off across the region’s AI supply chain on Tuesday. Investors questioned whether the soaring valuations of semiconductor firms could be sustained by future earnings growth. OCBC analysts noted that AI will remain the dominant investment theme in the second half of 2026, but buying is expected to become more selective, with greater emphasis on earnings delivery relative to elevated valuations.

Regional Equity Movements

  • South Korea: SK Hynix Inc (KS:000660) surged 5.1%, LG Innotek Co Ltd (KS:011070) rose 2.1%, and Samsung edged up 0.5%; nevertheless, the KOSPI index slipped 0.9% after having surged more than 100% in the first half of the year.
  • Taiwan: Hon Hai Precision Industry Co Ltd (TW:2317) gained 0.4%, while Taiwan Semiconductor Manufacturing Co (TW:2330) was largely unchanged after a >2% decline in the prior session; the Taiwan Weighted index recovered 0.2%.
  • Japan: Murata Manufacturing Co (TYO:6981) climbed 4.3% and TDK Corp (TYO:6762) rose about 2%, whereas Sony Corp (TYO:6758) slipped 0.5%; the Nikkei 225 fell 0.6% and the TOPIX eased 0.3%.
  • China & Hong Kong: Mainland Chinese CSI 300 was down 0.04% and the Shanghai Composite edged up 0.2%; Hong Kong’s Hang Seng index rose 1.1%.
  • Australia: The S&P/ASX 200 fell 1.3% after Reserve Bank of Australia Assistant Governor Sarah Hunter warned that recurring global supply shocks, including those linked to geopolitical conflicts, reinforce the need to keep inflation expectations anchored.
  • New Zealand: The Reserve Bank of New Zealand raised its benchmark interest rate by 25 basis points as expected, and the NZX 50 index slipped 0.6%.

Oil Price and Geopolitical Context

Oil prices continued to climb after the United States launched fresh strikes on Iran and tightened sanctions on Iranian oil exports following recent attacks on commercial shipping in the Strait of Hormuz. The higher energy prices kept inflation concerns in focus despite tentative bargain hunting across parts of the semiconductor supply chain.

Inflation and Central Bank Outlook

Regional inflation releases from Thailand, Taiwan and the Philippines broadly indicated easing headline price pressures. However, Maybank highlighted firmer core inflation in the Philippines, reinforcing its expectation that the Bangko Sentral ng Pilipinas will deliver another 25‑basis‑point rate hike at its August 27 policy meeting.

Upcoming Economic Events

Market participants will watch the Federal Reserve’s June meeting minutes, China’s June inflation data, Bank Negara Malaysia’s upcoming rate decision, and the U.S. consumer‑price inflation report for fresh clues on the global interest‑rate outlook. Corporate earnings will further test whether the AI investment boom can continue to justify the semiconductor sector’s lofty valuations.