Market Overview
Japan's Nikkei 225 slipped 1.3% and South Korea's KOSPI dropped 3.2% as investors locked in gains across semiconductor shares following last week’s rally. Mainland China’s Shanghai‑Shenzhen CSI 300 and the Shanghai Composite each eased 0.6%, while Hong Kong’s Hang Seng fell 1.1% and Indonesia’s Jakarta Composite added 0.8%; Australia’s S&P/ASX 200 was little changed and Taiwan’s weighted index was flat. In U.S. markets, Nasdaq 100 Futures rose 0.8% and S&P 500 Futures gained 0.3% after a softer‑than‑expected U.S. payrolls report tempered expectations for further Federal Reserve rate hikes.
Semiconductor Sector Moves
South Korea’s chipmakers retreated: Samsung Electronics Co Ltd slipped 0.9%, SK Hynix Inc lost 4.3%, and MediaTek Inc fell 1.4% in Taipei. In contrast, Hon Hai Precision Industry Co Ltd (Foxconn) rose 0.6% after posting record June and second‑quarter revenue driven by strong AI server demand, and Taiwan Semiconductor Manufacturing Co edged 0.6% higher. Bank of America commented that the recent correction in AI‑related equities reflected a positioning reset rather than weakening fundamentals, noting that spending on AI infrastructure remains supported despite investors becoming more selective.
Commodity and Geopolitical Context
Oil prices remained subdued as concerns over disruptions to shipments through the Strait of Hormuz faded and major producers continued restoring output, which improved the global inflation outlook. Easing geopolitical risk after the cease‑fire between Israel and Iran further underpinned regional sentiment.
Upcoming Regional Data
DBS expects Malaysia’s central bank to keep its policy rate unchanged. Inflation readings due from Thailand (expected to accelerate), China (expected to remain broadly steady), Taiwan (steady), and the Philippines (expected to ease slightly) will be closely watched for clues on the region’s price outlook. Taiwan’s June trade figures will also be monitored for signs that AI‑related demand continues to underpin technology exports.
Analyst Commentary
Investors are shifting focus to the upcoming earnings season after last week’s rebound from a two‑day chipmaker rout, seeking evidence that the billions of dollars poured into AI infrastructure are beginning to translate into stronger corporate earnings and sustained profit growth.