The selloff shows the Gulf conflict’s oil shock feeding directly into Asian equity sentiment, with Japanese investors pricing in higher input costs just as corporate earnings season gets underway, a combination that could weigh on Nikkei sentiment through the reporting period if oil stays elevated. The far sharper move in Seoul, deep enough to trigger a temporary trading halt, points to profit-taking after SK Hynix’s blockbuster US listing colliding with renewed doubts over how much further the AI memory cycle can run, a tension likely to keep chip stocks volatile globally in the near term. The Korean won’s slide and the rise in local bond yields alongside heavy foreign selling suggest the chip selloff is also denting broader risk appetite toward Korean assets, not just the semiconductor complex, while Japanese banks holding up against a weaker broader market points to some rotation toward domestic cyclicals as investors reassess sectors more exposed to global risk.
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Oil’s surge and a chip stock reckoning are giving Asian markets a rough start to the week.
Summary:
- Japan’s Nikkei fell just over 1% by the midday break on Monday as investors weighed rising oil prices against the start of corporate earnings season, while the broader Topix edged down slightly.
- An analyst said the market was concerned about rising costs from higher oil prices just as Japanese earnings season began.
- Chip-related stocks dragged the Nikkei lower, with Advantest and Tokyo Electron both falling by around 1 to 1.5%, while the index was also seen tracking South Korea’s memory chip heavy benchmark.
- Robot maker Yaskawa Electric tumbled over 14% after reporting a sharp drop in first quarter net profit, while Japanese bank shares including Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group rose more than 2% each, cushioning the Topix.
- South Korea’s KOSPI tumbled around 5%, hitting its lowest level in nearly two months and briefly falling by as much as 6% intraday, triggering a temporary halt to algorithmic trading.
- SK Hynix dropped by roughly 10% and Samsung Electronics fell around 6% as investors booked profits following SK Hynix’s blockbuster Nasdaq debut on Friday, when shares had surged close to 13%, with an analyst noting concerns about the memory chip cycle peaking remain unresolved.
- The Korean won weakened to around 1,505 per dollar, benchmark bond yields rose modestly, and foreigners were net sellers of Korean shares worth roughly 1 trillion won.
Asian equity markets sold off sharply on Monday as a renewed surge in oil prices weighed on Japan’s corporate outlook while a deepening selloff in chipmakers hammered South Korean shares, according to Reuters.
Japan’s Nikkei share average fell by just over 1% by the midday break as investors weighed rising input costs stemming from the latest escalation in the Middle East against the start of Japan’s earnings season, while the broader Topix index edged down slightly. An analyst said the market was concerned about increasing costs tied to higher oil prices just as the domestic reporting season got underway. Chip-related names led the decline, with Advantest and Tokyo Electron both falling around 1 to 1.5%, as an analyst noted the Nikkei was also being influenced by South Korea’s benchmark index, given its heavy weighting toward memory chipmakers such as SK Hynix. Elsewhere on the Tokyo market, robot maker Yaskawa Electric tumbled over 14% after posting a sharp decline in first quarter net profit, while banking shares held up better, with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group each rising more than 2% and helping to limit the Topix’s overall decline.
The selloff was considerably steeper in Seoul, where the KOSPI tumbled around 5%, touching its lowest level in nearly two months and falling by as much as 6% intraday, a move sharp enough to trigger a temporary sidecar halt to algorithmic trading. The slide was led by SK Hynix, which dropped by roughly 10% as investors booked profits following the chipmaker’s blockbuster Nasdaq debut on Friday, when shares had surged close to 13% in one of the year’s most closely watched US listings. Peer chipmaker Samsung Electronics also fell sharply, down around 6%, as an analyst said that despite the successful US listing, concerns about the memory chip cycle nearing its peak remain unresolved.
Elsewhere on the Korean board, battery maker LG Energy Solution and drugmaker Samsung BioLogics both posted modest gains of around 2.5%, while automakers Hyundai Motor and Kia were little changed, and steelmaker POSCO Holdings added around 1.5%. Decliners outnumbered advancers by a wide margin across the roughly 900 issues traded, and foreign investors were net sellers of Korean shares worth around 1 trillion won. The Korean won weakened to around 1,505 per dollar, while local bond yields moved modestly higher, with three year and ten year benchmark yields both rising by roughly 5 basis points, reflecting a broader repricing of risk across Korean assets alongside the chip sector selloff.
This article was written by fl6553e4b45d84486a91658a8b3f02bf22 at investinglive.com.