Asian stock markets closed lower on Thursday as weakness in semiconductor shares in South Korea weighed on the region and geopolitical worries revived concerns over energy and trade routes. Market participants were also parsing the implications of a central bank rate move in Seoul and awaited quarterly results from Taiwan Semiconductor Manufacturing Co (TSMC) for signals on AI-driven demand.
U.S. stock index futures were largely unchanged during Asian hours after Wall Street finished modestly higher overnight.
South Korea leads the downturn
The KOSPI plunged more than 6%, leading to a temporary trading halt, as major chipmakers experienced sharp declines. SK Hynix and Samsung Electronics each tumbled in the high single-digit to low double-digit percentage range, with losses reported around 8% to 11%.
Separately, the Bank of Korea raised its benchmark rate by 25 basis points to 2.75%, a move the central bank attributed to persistent inflationary pressures, rising household debt and resilience in the domestic economy.
Mixed moves across the region
Japan's Nikkei 225 fell about 2.7%, driven in part by selling in memory chip and related semiconductor stocks, while the broader TOPIX index declined around 1.1%.
China's Shanghai Composite and the Shanghai Shenzhen CSI 300 each slipped about 0.5%. Hong Kong's Hang Seng bucked the regional trend and rose roughly 1.7%.
Elsewhere, Australia's S&P/ASX 200 edged down 0.3% and Singapore's Straits Times Index was off about 0.5%. Futures tied to India's Nifty 50 were largely muted.
TSMC earnings in focus
Market attention was squarely on Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker and a key supplier to Nvidia and Apple. Analysts expected TSMC to report a fifth consecutive quarter of record profit, driven by strong artificial intelligence-related demand. Investors were watching to see if management would raise its full-year revenue and capital spending guidance.
Despite those expectations, the semiconductor sector overall remained under pressure amid questions about the durability of AI-driven spending.
Geopolitical and energy concerns
Investors grew more cautious after reports that the U.S. had stepped up attacks on Iran, reviving concerns about shipping through the Strait of Hormuz. A rise in crude oil prices stoked worries that persistent energy inflation could pressure corporate earnings and reduce policymaker flexibility on monetary easing.
In summary, heavy losses in South Korea's chipmakers, a BOK rate increase and renewed geopolitical friction combined to sap risk appetite across Asian markets as traders awaited fresh guidance from TSMC.