Asian stock markets took a hit Tuesday as investors cashed out after AI-driven rally that recently pushed several indexes to record highs. South Korea saw the biggest drop. Major semiconductor stocks faced heavy selling after weeks of gains from AI optimism.
The KOSPI index,South Korea's main market,plunged 4.6%, worst in the region. Blame falls on SK Hynix and Samsung Electronics,both down around 5%. SK Hynix had briefly overtaken Samsung as South Korea's top company,showing just how intense the AI surge was .
Investor mood soured despite progress between U.S . and Iran. Officials reportedly made headway in Switzerland over weekend, easing fears of oil supply disruptions via Strait of Hormuz. But long-term agreement doubts kept traders uneasy.
The U.S . Federal Reserve's hawkish tone also weighed on markets. Lower hopes for quick rate cuts made investors cautious. Add to that U.S. tech stock losses overnight, triggering profit-taking in Asia’s AI and semiconductor sectors.
Japan's Nikkei 225 index slipped 1.1%,with broader TOPIX down 0.8%. Investors trimmed tech and export stock holdings,despite recent PMI data showing better manufacturing and services activity in Japan. Rising input costs from Middle East tensions still a worry.
Chinese markets showed mixed results. CSI 300 index fell 1% while Shanghai Composite stayed steady. Investors torn between hopes for more stimulus from Beijing and fears of slowing global growth. In Hong Kong, Hang Seng Index slipped 0.5%,hit by weak tech and EV stocks .
Meanwhile,Australia's ASX 200 mostly flat as investors await inflation and labor data. These will hint at Reserve Bank of Australia's policy moves,especially after its decision to pause rate hikes . Global eyes also on upcoming U.S. PCE inflation report,crucial for Federal Reserve policy expectations. What will it signal…?
