Precise Investors Editorial Team
South Korea’s semiconductor complex rebounded after leading Tuesday’s selloff
Most Asian stock markets traded lower on Wednesday as investors remained cautious toward artificial intelligence-linked shares following this week’s valuation-driven semiconductor selloff, with rising oil prices and geopolitical tensions adding to the risk-off mood.
The cautious recovery came after Samsung Electronics Co Ltd blockbuster earnings triggered a broad selloff across Asia’s AI supply chain on Tuesday, as investors questioned whether soaring semiconductor valuations can continue to be supported by future earnings growth.
Technology shares found some lost ground after Tuesday’s rout, although investors appeared increasingly focused on distinguishing companies capable of delivering sustained earnings growth from those whose valuations have run ahead of fundamentals.
OCBC analysts said in a note that artificial intelligence should remain the dominant investment theme in the second half of 2026, but buying is likely to become increasingly selective as investors place greater emphasis on earnings delivery relative to elevated valuations after the sector’s powerful first-half rally.
South Korea’s semiconductor complex rebounded after leading Tuesday’s selloff. SK Hynix Inc jumped 5.1%, LG Innotek Co Ltd gained 2.1%, while Samsung Electronics edged 0.5% higher. Even so, the KOSPI slipped 0.9%, extending its retreat after surging more than 100% during the first half of the year.
Japan’s technology suppliers also recovered, with Murata Mfg Co climbing 4.3% and TDK Corp gaining about 2%, although Sony Corp slipped 0.5%. The Nikkei 225 fell 0.6% while the TOPIX eased 0.3%.
Outside technology, investors digested a series of inflation releases ahead of several major policy events.
Inflation data from Thailand, Taiwan and the Philippines broadly pointed to easing headline price pressures, although Maybank said firmer core inflation in the Philippines reinforces its expectation that the Bangko Sentral ng Pilipinas will deliver another 25-basis-point rate hike at its August 27 policy meeting.
Mainland Chinese shares were little changed ahead of Thursday’s June inflation report, with the Shanghai Shenzhen CSI 300 down 0.04% while the Shanghai Composite edged up 0.2%. Hang Seng rose 1.1%, recovering alongside technology stocks.
S&P/ASX 200 fell 1.3%, underperforming after Reserve Bank of Australia Assistant Governor Sarah Hunter warned that recurring international supply shocks, including those linked to war, reinforce the need for policymakers to keep inflation expectations anchored.
Markets will next turn their attention to China’s June inflation data and Bank Negara Malaysia’s rate decision for new clues on the international interest-rate outlook, while corporate earnings will test whether the AI investment boom continues to justify the semiconductor sector’s lofty valuations.
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