Asian stock markets declined on Monday, led by steep losses in South Korea and Hong Kong, as an AI-related sell-off intensified in line with weak sentiment from Wall Street. Investors also weighed mixed signals from China’s latest factory activity data.
The regional downturn mirrored losses in U.S. equity futures during Asian trading hours. Nasdaq futures slid around 1%, reflecting growing concerns that enthusiasm for artificial intelligence may have outpaced underlying fundamentals.
KOSPI plunges, Hong Kong stocks slide
South Korea’s KOSPI tumbled more than 5%, dragged lower by sharp declines in major chipmakers. Shares of Samsung Electronics and SK Hynix fell between 4.8% and 6.5%, weighing heavily on the index.
Hong Kong’s Hang Seng index dropped 2.5%, while the Hang Seng TECH index sank more than 3%, extending losses across technology-heavy stocks.
Other Asian markets also traded lower, pointing to a cautious start to the week after last week’s sell-off in U.S. equities.
Sentiment toward AI-linked stocks deteriorated following recent U.S. earnings reports, including results from Microsoft. The company flagged rising costs tied to heavy AI investment, raising doubts about near-term profitability.
Attention now turns to upcoming earnings from Amazon and Alphabet, which are widely viewed as key indicators for cloud computing and AI-related demand.
Adding to market caution, U.S. President Donald Trump nominated Kevin Warsh as the next chair of the Federal Reserve. Warsh is known for emphasizing inflation risks and is often seen as relatively hawkish on monetary policy.
Traders digest mixed China PMI data
Data released over the weekend showed China’s official manufacturing PMI slipped further below the 50 level in January, signalling continued contraction in factory activity and ongoing weakness in domestic demand.
In contrast, the private manufacturing PMI from RatingDog, which focuses more on smaller private firms, edged back into expansion territory. The data offered a more positive outlook for export-oriented sectors.
In mainland China, blue-chip stocks fell sharply, with the CSI 300 down 1.1% and the Shanghai Composite losing 1.3%, reflecting broader regional pressure.
Japan’s Nikkei 225 declined 1%, while the broader TOPIX index slipped 0.3%.
Australia’s S&P/ASX 200 fell 1.3%, and Singapore’s Straits Times Index eased 0.3%. Futures for India’s Nifty 50 were little changed at the open.
