Asian markets open sharply lower as AI sell-off spreads

Asian stock markets opened broadly lower on Wednesday as renewed selling in artificial intelligence and semiconductor shares combined with rising oil prices and elevated government bond yields. South Korea led the regional decline, while Japanese, Taiwanese and mainland Chinese equities also suffered significant early losses.

South Korean technology shares tumble
South Korea’s Kospi fell approximately 5.2 per cent during early trading as investors moved rapidly out of semiconductor and AI-related companies. The decline followed heavy losses among technology shares on Wall Street.

Samsung Electronics dropped around 6.9 per cent, while memory-chip manufacturer SK Hynix fell approximately 7.9 per cent. Both companies have benefited strongly from expectations of increasing demand for advanced chips used in artificial intelligence infrastructure, making them vulnerable to concerns that valuations have risen too quickly.

The sharp decline came despite HSBC upgrading its view of the South Korean market from neutral to overweight, citing improved valuations following recent volatility.

Tokyo follows Wall Street lower
Japan’s Nikkei 225 declined about 2.6 per cent after the opening, with semiconductor, electronics and technology-related companies among the weakest performers.

Japanese equities were also pressured by rising domestic bond yields. The yield on Japan’s ten-year government bond has moved close to 3 per cent, increasing financing costs and reducing the relative attraction of shares.

Companies exposed to global semiconductor investment and technology spending came under particular pressure as investors questioned whether the rapid expansion of AI infrastructure could continue at its recent pace.

China and Hong Kong show mixed resilience
Mainland Chinese shares opened lower, with the Shanghai Composite falling approximately 1.5 per cent. Concerns about global technology valuations and higher borrowing costs outweighed support from selected domestic companies.

Hong Kong’s Hang Seng initially declined around 0.4 per cent before recovering towards unchanged levels. Exchange operator Hong Kong Exchanges and Clearing reported record quarterly results, supported by increased market turnover and a strong recovery in initial public offerings.

However, technology shares remained volatile. Investors continued to assess earnings from major Chinese digital companies and whether spending on cloud computing and artificial intelligence would generate sufficient near-term returns.

Taiwan and Australia retreat
Taiwan’s Taiex fell around 1.4 per cent as semiconductor companies followed the global technology sell-off. Taiwan’s market remains particularly sensitive to changes in expectations for AI servers, advanced processors and data-centre investment.

Australia’s S&P/ASX 200 slipped approximately 0.4 per cent. Losses in interest-rate-sensitive companies were partly balanced by support for energy producers as crude prices strengthened.

Indian markets open cautiously
Indian equities also began Wednesday under pressure. The Sensex traded approximately 0.4 per cent lower in early dealings, while the Nifty 50 faced the possibility of extending a six-session losing streak.

Higher oil prices represent a significant concern for India because the country imports most of its crude requirements. Expensive energy can weaken the rupee, increase inflation and place additional pressure on corporate margins.

Foreign investors have withdrawn a record $25 billion from Indian equities during 2026, although they returned as net buyers during Tuesday’s session.

Oil and bond yields dominate sentiment
Brent crude remained above $90 per barrel amid renewed uncertainty surrounding relations between the United States and Iran and restrictions affecting tanker movements from the Persian Gulf.

Global bond yields also remained elevated. The US 30-year Treasury yield recently reached approximately 5.34 per cent, close to its highest level in two decades, as investors demanded greater compensation for inflation and government borrowing risks.

Markets are now awaiting minutes from the US Federal Reserve’s July meeting for further indications about interest-rate policy. Until investors receive clearer signals on inflation, oil supplies and AI valuations, Asian technology markets are likely to remain volatile.

Newshub Editorial in Asia – 19 August 2026