Major Asian markets showed signs of recovery on Thursday after the previous session’s technology-driven decline, with shares in Japan and South Korea moving higher as investors returned to selected semiconductor and electronics companies. The improvement remained uneven, however, as mainland Chinese shares continued to fall and several regional indices struggled to hold their early gains.
Technology selling triggered the fall
Wednesday’s decline was concentrated in markets with heavy exposure to artificial intelligence and semiconductor companies. South Korea’s KOSPI fell almost 6%, Japan’s Nikkei 225 lost around 1.7% and Taiwan’s TAIEX dropped 3.76%. Investors questioned whether the enormous sums being invested in artificial intelligence infrastructure would continue producing the exceptional earnings growth already reflected in technology valuations.
The selling was intensified by leveraged investment products, profit-taking and concerns about increasing competition within the global semiconductor industry. South Korean authorities responded by introducing additional measures intended to reduce volatility in leveraged exchange-traded funds.
Seoul rebounds from extreme volatility
The KOSPI recovered part of its losses on Thursday, rising as much as 4% during the session before closing 0.34% higher at 5,682.74. Bargain hunters returned after the index had lost almost 16% over two sessions, although the sharp reduction in the day’s gains demonstrated that confidence remained fragile.
Samsung Electronics provided important support after reporting stronger-than-expected quarterly results and predicting that global chip shortages could continue into 2028. SK Hynix also recovered from earlier weakness, while Hyundai Motor, LG Energy Solution and several major financial companies attracted renewed buying.
Japanese chip shares return to favour
Japan’s Nikkei 225 advanced by around 0.7%, ending two consecutive sessions of losses. Semiconductor-related companies led the recovery, with Advantest, Tokyo Electron, Kioxia Holdings and Murata Manufacturing recording significant gains.
The broader Topix remained weaker as declines among banks and financial companies limited the market’s advance. The contrasting performance indicated that investors were selectively returning to technology shares rather than embracing a broad increase in risk across the Japanese market.
Taiwan’s TAIEX also stabilised after two exceptionally difficult sessions. The index traded close to unchanged, limiting its decline to around 0.2% after losing more than 8% across Tuesday and Wednesday.
China remains under pressure
Hong Kong’s Hang Seng Index traded close to flat after outperforming the region during Wednesday’s turmoil. Mainland China was notably weaker, with the Shanghai Composite falling more than 1% and the CSI 300 also declining as Chinese technology companies remained under pressure.
Investors were awaiting clearer signals from Beijing regarding economic support, while concerns persisted over slowing growth, limited new stimulus and the effect of the international technology sell-off on Chinese AI companies.
Recovery remains vulnerable
The Federal Reserve’s decision to leave US interest rates unchanged offered some stability, but disagreement among policymakers created uncertainty over whether rates could rise later in the year. Oil prices near $90 a barrel and continuing conflict in the Middle East added another layer of risk.
Thursday’s trading therefore represented a partial recovery rather than a decisive turning point. Tokyo and Seoul regained some ground, but the mixed performance across China, Hong Kong, Taiwan, Singapore and India showed that investors remain cautious. Upcoming technology earnings and further signals from central banks are likely to determine whether the rebound can develop into a more sustained recovery.
Newshub Editorial in Asia – 30 July 2026
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