Asian equities moved lower on Wednesday as a widening retreat in technology names combined with a fresh bout of geopolitical risk to sap investor appetite. South Korea’s benchmark suffered the steepest decline, while markets across Japan, Taiwan and China also posted losses as traders prepared for quarterly earnings from several U.S. tech giants and the Federal Reserve’s policy decision later in the day.
Sentiment grew more fragile after Iran launched multiple ballistic missiles targeting U.S. forces, breaking the relative calm that had followed recent ceasefire discussions. The attacks pushed oil prices significantly higher and reignited concerns about inflation and the global interest-rate outlook. The U.S. Central Command said the missiles were successfully intercepted.
On the macro side, futures trading showed a cautious tone. Nasdaq 100 futures fell about 0.4%, while S&P 500 futures slipped roughly 0.1%. Regionally, the MSCI AC Asia Pacific ex Japan index lost about 3.5% as technology-led weakness spread across markets.
Tech sector rout and regional leadership
Investors continued to reassess high valuations tied to artificial intelligence, along with large capital spending plans and intensifying competition inside the semiconductor industry. The sector-wide reassessment weighed heavily on several major Asian markets.
South Korea’s KOSPI plunged more than 8% on Wednesday, extending a severe selloff that began the previous day. The benchmark has now declined roughly 34% from its recent peak, a slide that has revived debate over whether the correction could tighten domestic financial conditions enough to influence monetary policy, according to Nomura analysts.
Individual South Korean technology names registered sharp downturns. SK Hynix (000660) fell by more than 10% despite reporting a record quarterly profit driven by strong demand for high-bandwidth memory chips used in AI servers. Samsung Electronics (005930) dropped over 5%, and LG Innotek tumbled nearly 11%.
Japan’s Nikkei 225 was also under pressure, declining around 2% as electronics and technology stocks absorbed much of the selling. Kioxia Holdings fell nearly 8%, Murata Manufacturing slid more than 13%, and TDK Corp extended earlier losses. Sony Group outperformed within the sector, advancing more than 3%.
China’s equity markets traded lower as well, though their declines were smaller in magnitude. Hong Kong’s Hang Seng gave up about 1.5%, while the Shanghai Composite and the CSI 300 each eased by more than 0.5%.
Taiwan’s market, heavy in technology names, extended its retreat with the Taiwan Weighted index down nearly 4%. Taiwan Semiconductor Manufacturing (2330) and Hon Hai Precision Industry Co Ltd (Foxconn) each fell by more than 2%. TSMC said operations at its Kumamoto fabrication plant in Japan had resumed following a powerful earthquake, although tsunami warnings remained in some areas while assessments continued.
Australia and other regional moves
Australia bucked the broader regional weakness as the S&P/ASX 200 rose to its highest level since early April. Softer-than-expected inflation data reduced near-term expectations for further Reserve Bank of Australia tightening, encouraging traders to scale back bets on additional rate rises.
Mining heavyweight Rio Tinto (RIO) rose about 4.8% after reporting earnings that topped analyst expectations, pushing the stock to its highest level since July 7. Singapore’s FTSE Straits Times advanced roughly 0.5%, supported by gains in financial stocks, while India’s Nifty 50 was little changed.
Energy, policy and earnings watch
Oil prices surged after Iran’s missile strikes, reviving fears about potential disruptions to Middle East energy supplies. The jump in energy prices placed renewed focus on inflationary pressures just ahead of the Federal Reserve’s policy announcement later in the day. Although policymakers were still widely expected to keep interest rates unchanged, markets assigned roughly a 33% probability to another rate hike.
Investors will also be watching quarterly reports from U.S. tech giants Microsoft (MSFT) and Meta Platforms (META), with attention on how the companies’ results and outlooks may affect sentiment across global technology markets.
Summary and outlook
Wednesday’s market moves were driven by a confluence of factors: an extended re-pricing in AI and semiconductor-related stocks, renewed geopolitical risk after missile strikes, and the run-up to major U.S. corporate earnings and a key central bank decision. The combination of sector-specific competition and broader macro risks left regional sentiment fragile as trading progressed.
Market participants will likely remain sensitive to earnings updates, further geopolitical developments, and the Federal Reserve’s communiqué, all of which could shape risk appetite and the path for inflation and interest rates in the near term.