Precise Investors Editorial Team
Chip-heavy KOSPI led losses in Asia with a 5 per cent slide that has the benchmark down 13 per cent from last week’s record high
Asian stocks slumped on Monday as investors rushed out of the hottest AI-linked shares on fears the bull run has gone too far, too fast and as renewed hostilities in Iran pushed up oil prices.
The twin triggers for a rout that is highlighting a fragile market mood were last week’s disappointing outlook at chipmaker Broadcom.
Chip-heavy KOSPI, the world’s best-performing market this year, led losses in Asia with a 5 per cent slide that has the benchmark down 13 per cent from last week’s record high.
Nikkei dropped nearly 4 per cent with market darlings across the computer-chip production supply chain falling furthest, while Taiwan’s benchmark dipped 3.9 per cent.
The move looks more like a positioning and momentum unwind than a reassessment of the long-term AI story, said Marc Velan, head of investments at Lucerne Asset Management in Singapore.
Korean technology names have been among the strongest performers globally and were heavily owned, so when rate expectations shifted after the jobs report, they became a natural source of liquidity, Velan said.
The AI-drives-everything narrative frayed last week, said Bob Savage, head of markets macro strategy at BNY.
Whether this is a healthy pause in the nine-week equity rally or a top remains the key question. The IPO focus on SpaceX and Anthropic is part of the pause – whether to make room for the new market cap or to rethink value, he said.
Elsewhere, U.S. stock markets’ Nasdaq futures were attempting a recovery following a sharp selloff on Friday and European futures declined 1 per cent.
The U.S. Nasdaq shed 4.2 per cent on Friday.
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