- Most Asian stocks fell on Thursday due to fears of persistent inflation leading to high interest rates.
- Technology and chipmaking stocks saw the steepest declines as investors locked in recent profits.
- Semiconductor Manufacturing International Corp in China rose nearly 4%, bucking the trend after becoming the third-largest chipmaker by foundry capacity.
Most Asian stocks experienced a downturn on Thursday, driven by persistent concerns over inflation and the potential for continued high interest rates. The technology sector was hit hardest, as investors sought to lock in recent profits, contributing to the decline. This market movement followed a weak performance on Wall Street, where tech losses and weak earnings reports amplified fears of sustained high interest rates ahead of crucial economic data releases later in the week.
Market overview
Regional markets followed a weak lead from Wall Street, which had fallen on Wednesday due to tech losses, weak earnings, and ongoing concerns about high interest rates ahead of key economic readings this week.
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Sector performance
Tech-heavy indexes were the worst performers in Asian trade, with Japan’s Nikkei 225, Hong Kong’s Hang Seng, and South Korea’s KOSPI all down between 1% and 1.5%. An initial rally driven by hype over artificial intelligence appeared to be winding down, leading to decreased risk appetite and profit-taking. Major chipmaking stocks, which had significant exposure to the AI rally, were the biggest decliners. Japan’s Advantest Corp. slid 5.5%, while memory chipmaker SK Hynix Inc. fell 2% in South Korean trade. TSMC, the world’s largest contract chipmaker, sank 1.3% in Taiwan trade.
Notable outlier
A key outlier in the sector was Semiconductor Manufacturing International Corp. (SMIC), the largest chipmaker in China. The stock jumped nearly 4% after recent data showed it had become the third-largest chipmaker in the world by foundry capacity. This rise in SMIC’s stock price was a significant contrast to the broader declines seen in the technology and chipmaking sectors.
