Asian markets broadly declined today, marking a second day of falls primarily driven by concerns within the technology sector. South Korea's Kospi was hit hardest, slumping by as much as 6% and triggering a sidecar circuit breaker in early trading. Heavyweights like Samsung Electronics and SK Hynix each lost more than 7% of their value, erasing billions in combined market capitalization as a broad US semiconductor rout impacted chipmakers directly. Japan's Nikkei also fell by around 1%, although it recovered slightly from its worst levels of the session, still feeling the effects of tech selling and recent yield increases.
The widespread tech sell-off was fueled by a significant rotation out of AI-linked names, stemming from Wall Street after Meta's sudden announcement of capital expenditure discipline. This news, reportedly including plans to sell off computing power, reignited fears about overbuilt AI capacity. Adding to the pressure on chipmakers, Apple is reportedly in talks to source memory chips from blacklisted Chinese suppliers, ChangXin Memory Technologies and Yangtze Memory Technologies. While these chips would primarily be for the Chinese market, this development introduces a potential pricing threat to established Korean and Japanese chip manufacturers.
Hong Kong's Hang Seng Index was a notable exception, bucking the regional trend with a gain of 0.9%. This positive performance was supported by strength in local technology, biopharmaceutical, and automotive sectors upon the market's return from a holiday. Despite the regional downturn, US equity futures showed a mildly positive trend towards the end of the Asian trading session.
Economically, investor attention is keenly focused on the upcoming US non-farm payrolls data, expected to be released today due to a holiday observance. Economists polled by Reuters anticipate a rise of 110,000 jobs for June, with forecasts ranging widely, suggesting a high chance of an unexpected outcome. The jobless rate is projected to remain stable at 4.3%.
