{"slug": "asian-equities-drop-led-by-kospi-as-chip-sell-off-revives-ai-trade-concerns", "title": "Asian equities drop led by Kospi as chip sell-off revives AI trade concerns", "summary": "Asian equities fell on Thursday, led by a 4.5% drop in South Korea's Kospi, as a sell-off in semiconductor stocks revived concerns about the sustainability of the artificial intelligence trade. Chip bellwether SK Hynix tumbled over 8.4%, while Japan's Nikkei declined over 2%. Investors are assessing whether strong earnings can sustain the AI rally amid volatile price action in the chip sector.", "body_md": "# Asian equities drop led by Kospi as chip sell-off revives AI trade concerns\n\nInvestors assessing whether strong earnings can sustain the AI rally after sharp swings in semiconductor stocks\n\nASIAN stocks declined on Thursday (Jul 16) as fresh selling in semiconductor stocks renewed concerns over the sustainability of the artificial intelligence trade. [Crude oil climbed.](https://www.businesstimes.com.sg/companies-markets/energy-commodities/oil-prices-make-small-gain-smaller-us-inventory-draw)\n\nMSCI’s Asia Pacific equities gauge dropped 1.1 per cent, with South Korea leading with a 4.5 per cent decline. Chip bellwether SK Hynix tumbled over 8.4 per cent. Shares in Japan also declined with the Nikkei dropping over 2 per cent.\n\nMeanwhile, crude oil extended gains as the [US launched fresh strikes on Iran,](https://www.businesstimes.com.sg/international/global/us-strikes-iran-again-teheran-warns-existential-war-america) raising concerns that Middle East tensions will further disrupt energy supplies. Brent climbed for a fourth consecutive day to over US$85 a barrel.\n\nAustralian and New Zealand government bonds opened higher, tracking gains in Treasuries after [softer-than-expected US producer price inflation for June.](https://www.businesstimes.com.sg/international/economic-activity-rising-and-inflation-easing-slightly-us-fed-survey) That prompted traders to further dial back wagers on US Federal Reserve interest-rate increases in 2026. A Bloomberg gauge of the dollar steadied after two days of losses.\n\nWhile inflation reports on Jul 15 eased concerns over near-term US Fed hikes, the escalating conflict in the Persian Gulf has revived concerns over energy supplies from the region. Investors are also assessing whether strong earnings can sustain the artificial intelligence rally after sharp swings in semiconductor stocks exposed lingering concerns over the sector’s lofty valuations.\n\n“There’s no near-term pressure on the Fed, but oil is in the driver’s seat over the longer term,” said David Russell at TradeStation. “Energy saved the day in June, but that might become ancient history if the Strait of Hormuz doesn’t open soon.”\n\nA US-Iran interim peace deal signed in June has all but collapsed over the past week as the two sides feud over control of the vital strait, through which Saudi Arabia, Qatar, the United Arab Emirates and others send most of their energy exports.\n\nThe latest attacks come as US President Donald Trump [pledged to intensify the bombardment](https://www.businesstimes.com.sg/international/global/trump-pledges-escalate-attacks-until-iran-relents-hormuz) until Teheran stops attacking ships in the Strait of Hormuz and agrees to open the waterway.\n\nElsewhere, the chip sector remained in focus after a volatile month. After SK Hynix’s American depositary receipts fell 9 per cent on Wednesday, investors will look to Taiwan Semiconductor Manufacturing’s earnings later on Thursday for a fresh read on the AI buildout.\n\n“Semis staged a constructive recovery after another bruising start, but the SOX still ended lower by roughly 2 per cent. Whether that bounce has any durability remains an open question heading into Asia, where chips will again be under the microscope after several sessions of volatile price action,” said Brendan Fagan, macro strategist at Bloomberg Markets Live.\n\n“The sector stabilised today, but conviction remains elusive.” BLOOMBERG\n\nDecoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.\n\nShare with us your feedback on BT's products and services\n\n[TRENDING NOW](/pulse?ref=trending-now)\n\nGovTech retrenches 93 staff in first phase of agency’s 2-year workforce transformation\n\nA new kind of ‘ceasefire’ between US and Iran where talks, strikes are part of the same process\n\nDepartment store heir to outback cattleman: Inside Bruce Cheung’s US$130m wagyu gamble\n\nEarly payout from Philippines’ Maharlika Investment Fund raises eyebrows over its true nature", "url": "https://wpnews.pro/news/asian-equities-drop-led-by-kospi-as-chip-sell-off-revives-ai-trade-concerns", "canonical_source": "https://www.businesstimes.com.sg/companies-markets/capital-markets-currencies/asian-equities-drop-led-kospi-chip-sell-revives-ai-trade-concerns", "published_at": "2026-07-16 00:57:20+00:00", "updated_at": "2026-07-16 01:25:56.820771+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-chips"], "entities": ["SK Hynix", "MSCI", "Nikkei", "Taiwan Semiconductor Manufacturing", "Bloomberg", "TradeStation", "Federal Reserve", "Donald Trump"], "alternates": {"html": "https://wpnews.pro/news/asian-equities-drop-led-by-kospi-as-chip-sell-off-revives-ai-trade-concerns", "markdown": "https://wpnews.pro/news/asian-equities-drop-led-by-kospi-as-chip-sell-off-revives-ai-trade-concerns.md", "text": "https://wpnews.pro/news/asian-equities-drop-led-by-kospi-as-chip-sell-off-revives-ai-trade-concerns.txt", "jsonld": "https://wpnews.pro/news/asian-equities-drop-led-by-kospi-as-chip-sell-off-revives-ai-trade-concerns.jsonld"}}