South Korean, Hong Kong stocks lead Asian markets down

KOSPI plunged more than 5 per cent, while Hang Seng index shed 2.5 per cent, with the Hang Seng TECH sub-index losing more than 3 per cent

Asian stock markets dropped on Monday, led by sharp declines in South Korean and Hong Kong shares, as an AI-driven sell-off gathered pace, while investors digested mixed signals from China’s latest factory activity data.

KOSPI plunged more than 5 per cent, weighed down by losses in heavyweight chipmakers – Samsung Electronics and SK Hynix declining between 4.8 per cent and 6.5 per cent.

Hang Seng index shed 2.5 per cent, with the Hang Seng TECH sub-index losing more than 3 per cent.

Elsewhere, markets were broadly weaker, reflecting a cautious start to the week.

Data released on Saturday showed that China’s official manufacturing PMI slid further below the 50 mark in January, pointing to a contraction in factory activity and highlighting persistent weakness in domestic demand.

In contrast, the RatingDog private manufacturing PMI, which focuses more on smaller, private firms, edged back into expansion territory, offering a more optimistic view of export-oriented sectors.

In mainland China, the blue-chip Shanghai Shenzhen CSI 300 dropped 1.1 per cent, while the Shanghai Composite shed 1.3 per cent, amid a broader downturn.

Nikkei 225 declined 1 per cent, while the broader TOPIX index edged 0.3 per cent lower.

S&P/ASX 200 slid 1.3 per cent, while Singapore’s Straits Times Index dropped 0.3 per cent.

Sentiment toward AI-linked shares has deteriorated following recent U.S. earnings, including results from Microsoft Corporation, which highlighted rising costs tied to heavy AI investment and raised questions about near-term returns.

The outlook for the sector remains in focus this week, with earnings due from Amazon and Alphabet, both seen as bellwethers for cloud computing and AI-related demand.