Asian equity markets suffered steep losses, with South Korea's benchmark KOSPI plunging more than 8% and Japan's Nikkei 225 falling nearly 5%, marking one of the region's sharpest declines in recent months. The sell-off was primarily driven by heavy losses in technology and semiconductor stocks, particularly major chipmakers such as Samsung Electronics, SK Hynix, and SoftBank-related investments.
Investor sentiment weakened amid growing concerns that the recent rally in artificial intelligence (AI) and semiconductor stocks may have become overvalued. Fresh worries intensified after rising memory chip costs prompted major technology companies to increase product prices, raising fears that demand for AI hardware could slow and profit margins may come under pressure.
South Korea's market was hit particularly hard due to its heavy dependence on semiconductor companies, with Samsung Electronics and SK Hynix accounting for a significant share of the KOSPI index. The sharp decline even triggered market-wide circuit breakers as panic selling accelerated. Meanwhile, Japan's Nikkei also faced pressure due to declines in technology giants and broader concerns over global economic growth.
Analysts say investors are closely watching developments in the global technology sector, inflation trends, central bank policies, and corporate earnings to assess whether the correction is temporary or signals a broader shift in market sentiment.
