Equity markets across the Asia-Pacific region retreated on Thursday, with South Korea and Japan at the forefront of a broader pullback driven by a downturn in chipmaker valuations — pressured by expanding Chinese competition and a U.S. inflation reading that came in above forecasts.
The KOSPI fell 7.2% and the Nikkei 225 declined 4.7%, marking a broadly weaker session across South Korean and Japanese equity markets. Trading across the Asia-Pacific region pushed the MSCI index down by roughly 3%, leaving it within reach of values last recorded in July.
Hong Kong's Hang Seng lost 1.1%, China's CSI 300 fell 1.4%, and the Shanghai Composite declined 1.5%. Weakness on Wall Street set the tone, with the Nasdaq Composite shedding 1.9% before domestic markets followed suit.
Semiconductor stocks absorbed steeper percentage drops than the rest of the market, placing them at the low end of the day's trading. The Philadelphia Semiconductor Index recorded its longest consecutive-day retreat since May 2025, with declines logged across each of six trading sessions in a row.
Shares in SK Hynix lost 11.2% of their value, with Samsung Electronics not far behind at a 9.4% decline. Shares in Kioxia and LG Innotek each shed more than 10% of their value, while TSMC, Foxconn, and Largan each posted losses of roughly 2% or above.
Shares in the memory-chip sector came under pressure after ChangXin Memory Technologies (CXMT), a Chinese chipmaker, disclosed advances in higher-density DRAM — a development that analysts noted could reshape the competitive landscape of the global market. Broadcom chief executive Hock Tan raised concerns about speculative bets on artificial intelligence, a stance that contributed to downward movement across technology valuations.
CoreWeave stock retreated by up to 17% on Wednesday, with investors pointing to questions around the company's financing arrangements. Ahead of TSMC's next earnings release, market participants are weighing whether sustained demand for AI-related chips can push the chipmaker's financial results to a sixth straight quarterly peak.
A consumer price index reading that came in above forecasts pushed market expectations toward another interest rate increase by the Federal Reserve. Trader pricing for a quarter-point rate adjustment at the Fed's October 27–28 gathering edged up to 31.6%, a gain of roughly nine percentage points from the 22.1% recorded beforehand. Market participants had priced in roughly 40 basis points of further rate increases through January.
Two events on traders' radars — an address by Federal Reserve Chair Kevin Warsh in Bangkok and a pair of Thursday data releases covering producer prices and retail sales — stand to shape how markets move in the near term.
Singapore's Straits Times index fell 0.9%, contrasting with more modest retreats of 0.1% across equity markets in both Australia and New Zealand. Brent crude gave back $1.39 to settle at $104.67 a barrel, while West Texas Intermediate retreated $1.02, landing at $94.07, as petroleum markets also came under pressure.
Chip-sector rivalry, AI-inflated valuations, and persistent inflationary pressure in the United States have combined to leave Asian stock markets in a holding pattern, with investors pulling back from new positions while they wait to see how those uncertainties resolve.
