Asian equities drop led by Kospi as chip sell-off revives AI trade concerns

Published Thu, Jul 16, 2026 · 08:57 AM — Updated Thu, Jul 16, 2026 · 10:40 AM

ASIAN stocks declined on Thursday (Jul 16) as fresh selling in semiconductor stocks renewed concerns over the sustainability of the artificial intelligence trade. Crude oil climbed.

South Korea’s Kospi Index – a bellwether for AI investments – slid more than 6 per cent with SK Hynix and Samsung Electronics contributing most to the declines.

Kioxia tumbled more than 13 per cent in Tokyo. The selloff dragged MSCI’s Asia Pacific equities gauge down 1.5 per cent, snapping a two-day advance.

Among the main market moves, the S&P 500 futures were little changed as at 9.47 am Tokyo time. The Hang Seng futures rose 0.7 per cent, the Nikkei 225 futures (OSE) fell 3.1 per cent, Japan’s Topix fell 1.2 per cent and Australia’s S&P/ASX 200 was little changed.

Meanwhile, South Korea’s Financial Services Commission head said the country will soon announce measures regarding the controversy over leveraged exchange-traded funds linked to Samsung and SK Hynix, which are fuelling stock market volatility.

Brent crude rose for a fourth day to above US$85.25 a barrel after the US launched fresh airstrikes on Iran, adding to concern that escalating Middle East tensions will further disrupt energy supplies.

The durability of the AI rally remains in focus as investors assess whether strong earnings can justify lofty chip sector valuations after weeks of volatile trading.

Meanwhile, while inflation reports this week eased concerns over near-term Federal Reserve hikes, the escalating conflict in the Persian Gulf has revived fears over energy supplies from the region.

“There’s no near-term pressure on the Fed, but oil is in the driver’s seat over the longer term,” said David Russell at TradeStation.

“Energy saved the day in June, but that might become ancient history if the Strait of Hormuz doesn’t open soon.”

In other corners of the market, Australian and New Zealand government bonds advanced after softer-than-expected US producer price inflation for June drove a Treasuries rally on Wednesday and prompted traders to further scale back expectations for Fed rate increases this year.

The chip sector remained in focus after a volatile month.

After months of outsized gains in stock prices, investors are demanding stronger evidence that surging capital spending on AI will translate into sustained earnings growth across the semiconductor supply chain.

After ASML – a linchpin in the semiconductor supply chain – lifted its annual sales forecast for the second time this year, investors will look to Taiwan Semiconductor Manufacturing’s earnings later on Thursday for a fresh read on the AI buildout.

ASML also plans to raise prices, the Information reported, citing four unidentified people with knowledge of the discussions. BLOOMBERG