Asian stock markets in red, Kospi down 10.8%

Asian stock markets are trading in negative territory on Tuesday, except India, amid declines in the shares of chip manufacturers, despite an easing of geopolitical tensions.

South Korea’s KOSPI index closed at 6,023.7 points, down 10.8%, while Japan’s Nikkei 225 index closed at 62,446 points, down 3.8%.

In China, the Shanghai Composite Index fell 1.5% to 3,799 points; in Hong Kong, the Hang Seng Index dropped 0.1% to 25,174 points; and in India, the Sensex Index stood at 76,884 points, up 0.1% from the previous close.

New concerns regarding AI investments have triggered a wave of selling in the shares of global chip manufacturers and the sharp sell-off in chipmakers’ shares is limiting the positive impact on stock markets stemmed from the decline in oil prices.

Investor concerns have grown following reports that US-based chipmaker Nvidia’s latest funding commitments related to AI have exceeded $750 billion.

This has triggered concerns about rising debt levels and perpetuated uncertainty over whether demand for AI infrastructure can keep pace with the unprecedented level of investment.

The decline in chipmakers’ stocks on the New York Stock Exchange spilled over into Asian markets; in South Korea, shares of the country’s chip giant SK Hynix fell 14.4%; Samsung Electronics’ shares dropped 13.6%, and Hanmi Semiconductor’s shares declined 12.1%.

Sharp declines were also seen among Japanese companies operating in the chip sector, with Tokyo Electron’s shares falling by 11%, Advantest’s by 10.1%, and SoftBank Group’s by 4.9%.