Asian stocks fell on Thursday due to concerns about inflation driving high interest rates, with the technology sector recording the biggest decline as investors also locked in profits from recent gains.
Regional markets were impacted by weakness from Wall Street, which declined on Wednesday due to tech sector losses and some weak earnings, while concerns about high interest rates lingered ahead of key economic indicators this week.
Future indicators of the U.S. stock market fell during the Asian session, with full focus on the upcoming GDP data and PCE data – the Federal Reserve’s favorite inflation measure (FED), to be released on Thursday and Friday.
Technology and chip manufacturing led the losses as the AI rally cooled off.
Tech heavy indices performed the worst in Asian trading, with Japan’s Nikkei 225, Hong Kong’s Hang Seng, and South Korea’s KOSPI falling between 1% and 1.5%.
The recent rally in this sector, driven by hype over artificial intelligence, now seems to be ending, while reduced risk also prompted investors to lock in recent profits in this sector.
Major chip manufacturing stocks – which had previously been the most affected by the recent AI rally – were the biggest decliners. Japan’s Advantest Corp. (TYO:6857) fell 5.5% and was the worst performer on the Nikkei index. Meanwhile, memory chip manufacturer SK Hynix Inc (KS:000660) fell 2% in South Korea trading.
TSMC (TW:2330) (NYSE:TSM) – the world’s largest contract chipmaker – fell 1.3% in Taiwan trading.
An important exception in this sector was the Semiconductor Manufacturing International Corporation (HK:0981) – China’s largest chipmaker. The stock rose nearly 4% after recent data showed it had become the third-largest chipmaker in the world by foundry capacity.
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