Asian equities opened Tuesday under pressure as the selloff in US chipmakers reached South Korea and Taiwan, the region’s biggest semiconductor hubs. A sharp drop in oil prices offered some cushion, but not enough to prevent a broad retreat in the technology-heavy markets.
Korea leads the decline
Asian stocks opened lower as a deepening selloff in US chipmakers outweighed a sharp fall in oil prices, with the MSCI Asia Pacific gauge slipping 0.5% and South Korea’s Kospi falling more than 3.34% at the start. By the morning session the losses had eased slightly. The Kospi was down 2.78% at 5,695.99, while Taiwan’s benchmark lost 1.15% to 44,403.80. Another market wrap showed the pressure ranging wider. MSCI’s broadest index of Asia-Pacific shares outside Japan declined 1.13%, with Taiwan’s Taiex down 1.9%.
The sensitivity is easy to explain. The two markets are dominated by companies that make memory and advanced chips for artificial intelligence hardware. When investors question whether the largest technology firms can keep spending, those suppliers are among the first to feel it. Samsung Electronics and SK Hynix had each fallen about 4% in premarket trading after Intel’s plunge last Friday.
Hong Kong and Australia steady
Not every market followed the chip names lower. Hong Kong’s Hang Seng rose 0.60% to 23,533.36, and Australia’s ASX 200 edged up 0.02% to 8,858.00. Japanese markets stayed shut for the Culture Day holiday, although Hang Seng futures rose 0.7%.
The pattern shows how concentrated the current anxiety is. Markets with large technology hardware exposure are struggling, while those with a broader mix of banks, property and consumer companies have fared better.
India rallies on cheaper crude
India has been the bright spot. On Monday, the Sensex surged 1,233.25 points, or 1.66%, to close at 75,692.78, while the Nifty 50 advanced 387.70 points, or 1.68%, to settle at 23,440.80. The main reason was oil, since India imports most of the crude it uses and benefits directly when prices fall. Analysts pointed to a drop in Brent to around $110 and a decline in the US 10-year Treasury yield as supportive factors.
The tailwind continued into Tuesday. Gift Nifty, the offshore indicator, traded about 94 points above the Nifty’s Monday close, pointing to a gap-up start. Indian benchmarks have a different driver from those in North Asia, but analysts warn that a sustained global chip rout could still weigh on sentiment, particularly in the IT sector.
Oil eases from its peak
Crude has retreated significantly from last week’s highs. Brent was trading around $105, well below the six-month high of $118 it touched on Friday. There has been no drastic development in the Iran war, although the situation remains tense. Lower energy prices ease inflation fears and benefit importers in Asia, which is one reason the regional decline has been orderly rather than disorderly.
Why the selloff matters
The market’s mood has shifted from enthusiasm to scrutiny. Last week’s rout in US semiconductors began after weak guidance from Intel and heavy cash burn at the largest cloud companies. Foreign investors made a record withdrawal from Taiwanese stocks in October, pushing the benchmark closer to a technical correction. This week’s moves add to that pattern.
Yet the underlying demand has not vanished. South Korea reported a record trade performance in October, led by chips, and corporate customers are still placing orders. The tension is between strong near-term numbers and doubts over how long the spending can last. Until investors see clearer evidence of returns on AI investment, volatility in the region’s chip stocks is likely to continue.
What to watch
Three things will guide trading in the coming days. The first is the outcome of Tuesday’s US midterm elections, which could shift expectations for technology regulation and government spending. The second is the US jobs report on Friday, which will influence interest-rate expectations. The third is whether US chip stocks stabilise, since Asian markets have been following Wall Street’s lead rather than setting their own course.
For now, Asia is trading a familiar split screen: falling chip stocks on one side, falling oil prices on the other. Which side wins will determine the direction of regional markets for the rest of the week.
