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- Stock markets in the Asian region faces major sell-off, tracking weakness in US tech stocks.
- Chipmakers continue to express confidence that AI spending remains robust.
- Elevated oil prices could add burden on Asian economies.
Asian stock markets face a sharp sell-off on the last trading day of the week, tracking seeking negative cues from United States (US) equity markets. US technology stocks fell sharply on Thursday as stocks of sophisticated chips extended their losses.
During the day, Nikkei has fallen like a house of cards, trading over 4% down near 64,100, Shanghai plunges 1.55% to near 3,820, Hang Seng plummets 1.64% at around 24,600. Meanwhile, South Korean markets are closed today due to Constitution Day.
Chipmakers face heat on Thursday after Alphabet Inc. delayed the release of its flagship Gemini 3.5 Pro AI model, leading to concerns over capital spending on Artificial Intelligence. However, chip manufacturers have posted strong second-quarter earnings and have hiked their revenue guidance for forthcoming quarters.
Taiwan Semiconductor Manufacturing Co. (TSMC) has raised its full-year 2026 revenue growth guidance to slightly above 40%, up from more than 30%, Yahoo Finance reported.
Meanwhile, weak revenue guidance from Netflix also hurted US stocks. The entertainment tech- giant guided $12.86 billion for the third quarter this year, a little over $12.6 billion reported in the second quarter, citing concerns in subscribers’ growth as platform is in a matured stage.
On the geopolitical front, the continued military aggression between the US and Iran is also impacting Asian equity markets. Elevated oil prices are increasing the burden of higher foreign outflows on Asian economies, given that they rely heavily on crude imports to meet their energy needs.
Asian stocks FAQs
Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.
Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.
Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.
Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.












