Market Overview
Asian equities experienced a sharp sell‑off on Tuesday, with the regional sentiment turning negative as concerns over artificial‑intelligence (AI) investment financing intensified. The South Korean benchmark KOSPI plunged more than 9%, reaching its lowest level since mid‑April and activating both side‑car and circuit‑breaker mechanisms during the session. In Japan, the Nikkei 225 fell as much as 4%, its weakest point since 22 May, while the broader TOPIX index slipped roughly 3%.
Chipmaker Decline
The rout was led by semiconductor stocks. South Korea’s memory leader SK Hynix Inc (KS:000660) dropped up to 13%, and Samsung Electronics Co Ltd (KS:005930) fell up to 10%. In Japan, Kioxia Holdings Corp (TYO:285A) tumbled up to 18%, and other equipment makers—including Tokyo Electron Ltd (TYO:8035), Disco Corp (TYO:6146), Nikon Corp (TYO:7731) and Murata Manufacturing Co (TYO:6981) – each slid more than 9%.
AI Financing Concerns
Investors grew uneasy after reports that NVIDIA Corporation’s latest AI‑related financing commitments exceeded $750 billion, raising worries about rising leverage and whether demand for AI infrastructure can sustain such unprecedented capital deployment. The anxiety was compounded by a report from The Information that a Chinese state‑backed firm had begun mass‑producing immersion deep‑ultraviolet (DUV) lithography machines, heightening competitive pressure on Japanese semiconductor‑equipment manufacturers and on European leader ASML Holding NV (AS:ASML).
Broader Market Moves
Australia’s S&P/ASX 200 edged down 0.3% and Singapore’s Straits Times Index fell 0.5%. Oil prices continued their recent decline after former U.S. President Donald Trump indicated a “good chance” of reaching a deal with Iran, prompting a pause in daily U.S. strikes and easing inflation concerns ahead of the upcoming Federal Reserve meeting.
Chinese and Hong Kong Tech Resilience
Despite the regional weakness, Chinese and Hong Kong technology shares showed relative strength. Hong Kong’s Hang Seng index rose 0.3%, while mainland indices were mixed: the Shanghai Composite fell 0.6% and the Shanghai‑Shenzhen CSI 300 slipped 1.2%. Optimism was bolstered by CXMT Corp’s blockbuster Shanghai debut, which reinforced expectations that Beijing’s push for semiconductor self‑sufficiency will gain momentum. Reports of domestic immersion DUV lithography capability further lifted confidence that Chinese manufacturers could narrow the technology gap with overseas rivals.
Individual Stock Performers
Among the notable gainers, JD.com (HK:9618) rose nearly 3%, Meituan (HK:3690) advanced about 1.6%, and Alibaba Group Holding Ltd (HK:9988) added roughly 1.4%.
Upcoming Catalysts
The market now looks ahead to a packed week of macro and corporate events, including policy decisions from the Federal Reserve, the Bank of Japan and the Bank of England, as well as quarterly earnings releases from major U.S. technology firms such as Microsoft, Meta Platforms, Apple and Amazon.