Asian markets largely fell on Tuesday, with South Korea's Kospi experiencing the steepest losses, plummeting 10.8% to 11.63% (depending on the source) and trading temporarily halted. Major chipmakers SK Hynix Inc. and Samsung Electronics Co. saw significant drops, with SK Hynix down up to 13% and Samsung Electronics down as much as 10%. This steep decline was attributed to worries that China's advancements in chipmaking equipment could threaten the competitive position of global chip manufacturers.
Japan's Nikkei 225 also fell by 4.38% to around 62,090, and the broader Topix index lost 2.52% to 2.3% (depending on the source). Meanwhile, China's SSE Composite closed lower by 0.83% to around 3,830. Equity analyst Jing Jie Yu of Morningstar suggested the market was "spooked by the progress of China’s chipmaking equipment capabilities," though he believed the sell-off was likely a "knee-jerk reaction and overdone."
In contrast, Hong Kong's Hang Seng Index bucked the regional trend, rising 0.41% to 0.58% (depending on the source) to around 25,310.85/25,350. This surge was driven by gains in companies like NetEase (up 4.5%), JD.com (up 4.11%), and Nongfu Spring (up 3.77%), with the market benefiting from robust capital inflows and sustained investor enthusiasm for local tech and AI shares.
The selling pressure was not isolated to Asia, as the U.S. market also saw chipmakers decline. Micron Technology dropped 8.9%, Advanced Micro Devices fell 8.1%, and Applied Materials was down 7.8%. Despite these tech sector declines, the S&P 500 rose 0.2% to 7,428.78 and the Dow Jones Industrial Average jumped 537.24 points to 52,747.32, while the Nasdaq composite slipped 0.2% to 24,876.91. Investors are also trimming their bets on a Federal Reserve interest rate hike, with the probability now at 31.5%, down from over 36% yesterday.
