Asia stocks tumble as AI rout deepens.
Asian equities fell sharply on Tuesday, with South Korea and Japan leading losses, as fresh concerns over artificial intelligence investments sparked another wave of selling in global chipmakers.
Regional sentiment also weakened as tech-heavy Nasdaq 100 Futures fell 1% and S&P 500 Futures slipped 0.3%. Wall Street closed mixed overnight after erasing most of their gains. Investors also weighed intensifying competition from China’s semiconductor industry.
Chip rout deepens as Korea, Japan take the beating
South Korea’s benchmark KOSPI plunged 10% to its lowest level since mid-April, triggering sidecar and circuit-breaker mechanisms earlier in the session.
Japan’s Nikkei 225 fell as much as 4.4% to its weakest level since May 22, while the broader TOPIX index slipped 2.7%.
Investors grew increasingly concerned after reports that NVIDIA Corporation (NASDAQ:NVDA) latest AI-related financing commitments exceeded $750 billion, fuelling worries over rising leverage and whether demand for AI infrastructure can keep pace with unprecedented investment.
Oil extends slide.
Oil prices extended losses in Asian trade on Tuesday as hopes for renewed talks between the United States and Iran continued to ease concerns over a broader disruption to Middle East crude supplies.
As of 21:23 ET (01:23 GMT), Brent Oil Futures fell 1.3% to $87.24 a barrel, while Crude Oil WTI Futures lost 1.2% to $81.61 a barrel, extending sharp losses after both benchmarks tumbled more than 9% in the previous session.
The latest losses came as investors continued to unwind last week’s rally, with signs of de-escalation prompting traders to scale back bets that the conflict would severely disrupt global oil exports.
Crude has reversed sharply over the past two sessions after briefly pushing Brent above $100 a barrel last week, as traders increasingly bet the worst of the Middle East conflict may have passed.
Asia FX muted as dollar steadies.
Asian currencies traded in tight ranges on Tuesday as the U.S. dollar hovered near a one-month high, with investors reluctant to take fresh positions before this week’s Federal Reserve meeting despite easing oil prices tempering inflation concerns.
The US Dollar Index slipped 0.1% to 101.46, while the Japanese yen’s USD/JPY pair held near 164 yen.
Markets continued to price roughly a 38% chance of a 25-basis-point Fed rate hike on Wednesday, while investors also awaited U.S. GDP and core PCE inflation data for further policy clues.
Yen languishes as traders await BOJ; regional currencies mixed
The Japanese yen remained pinned near multi-decade lows, with the USD/JPY pair little changed at 163.72 yen, as traders looked to Friday’s Bank of Japan decision for fresh guidance on the pace of policy normalisation.
While policymakers are widely expected to leave interest rates unchanged, markets expect the central bank to keep the door open to further tightening after repeated verbal intervention has done little to arrest the yen’s prolonged decline.
The South Korean won’s USD/KRW pair was little changed even after the country’s equity market suffered a steep technology-led selloff, while Taiwan’s dollar underperformed as USD/TWD rose 0.4%.
Important Note: The information found on Ausprime platform is intended only to be informative, is not advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not include any specific investment objectives, financial situation and needs of any specific person who may receive it. The past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statement
