Asia Equities Mixed as AI Concerns Weigh on Chip Stocks — Update

By Megan Cheah and Kimberley Kao

Asia-Pacific equities were mixed, with chip stocks leading declines as concerns about the longevity of artificial-intelligence enthusiasm weighed on market sentiment.

The highly volatile South Korean equities market, home to chip makers SK Hynix and Samsung Electronics, erased much of its Wednesday gains and slipped into a bear market, which refers to a decline of at least 20% from a recent high.

The sharp drop prompted Korea Exchange to briefly suspend trading in the benchmark Kospi's constituent stocks early Thursday.

The index was recently 5.9% lower, while SK Hynix and Samsung Electronics, which collectively account for around half of the capitalization-weighted index, declined 12% and 8.5%, respectively.

SK Hynix, which logged its steepest fall on record on Monday, saw its American depository receipts close 9.0% lower overnight amid weakness in U.S. semiconductor stocks such as Nasdaq-listed Micron Technology and Intel.

Japanese AI-related companies Advantest, SoftBank Group and Tokyo Electron fell 5.1%, 6.4% and 6.3% respectively. The losses dragged the Nikkei Stock Average more than 2% lower.

Both the Nikkei and the Nasdaq composite have "ridden the wave of AI enthusiasm, but now that trade seems buffeted by uncertainty and at risk of more declines," said Chris Beauchamp, chief market analyst at IG, in an email.

Hong Kong's Hang Seng Index bucked the regional trend to rise 2.1%, as did India's Sensex, which edged up by 0.4%.

Meanwhile, the U.S. dollar's pullback after U.S. producer-price inflation surprised to the downside in June offered modest relief for regional currencies, MUFG senior currency analyst Lloyd Chan said in a note.

The dollar last traded 0.3% lower at 1,480.70 won and was down 0.05% at 162.10 yen.

Commonwealth Bank of Australia's Carol Kong flagged that the prospect of the U.S. and Iran returning to a "hot war" poses downside risks to the Australian dollar against its U.S. counterpart. The Australian dollar was recently 0.2% lower at US$0.6994.

Market participants are also keeping a close eye on Middle East tensions.

President Trump is considering expanding U.S. military operations in Iran, U.S. officials said. Options include stepping up airstrikes and sending ground forces to seize Iranian islands near the Strait of Hormuz, The Wall Street Journal reported.

Oil futures erased earlier gains, with front-month West Texas Intermediate crude oil futures falling 0.3% to $79.40 a barrel and front-month Brent 0.5% lower at $84.54 a barrel.

"Prices remain volatile because every sign of improved shipping security reduces immediate supply fears, while any new attack, military warning or vessel disruption quickly restores buying pressure," said Naeem Aslam, chief investment officer at Zaye Capital Markets.

Write to Megan Cheah at megan.cheah@wsj.com and Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

July 16, 2026 02:29 ET (06:29 GMT)