A wave of sell-offs swept through stock markets across Asia in morning trading on July 13. This negative trend was driven by a sharp correction in the technology sector, which has been a major pillar of the market, while also reflecting investor anxiety over corporate valuations deemed too high.
South Korea's Seoul market recorded the most significant decline, with the Kospi index plunging as much as 5.0%. This pressure was worsened by a 10% drop in the share price of chip-making giant SK Hynix. This decline extends the company's negative trend, which has wiped out a third of its market capitalization in just a month. Samsung Electronics experienced a similar situation, with its stock declining by more than 6%.
This negative sentiment also spread to other financial hubs in Asia. In Tokyo, the Nikkei 225 index shed 1.1%, while the Shanghai, Singapore, and Jakarta stock exchanges also ended in the red. On the other hand, markets in Hong Kong, Taipei, and Manila showed resilience, bucking the downward trend observed in most of the region.
In addition to volatility in the tech sector, a strengthening US dollar also weighed on global markets. Investors are turning to safer assets amid speculation over Federal Reserve (Fed) interest rate policies, which are projected to rise to curb inflation. The Japanese yen and other major currencies weakened against the US dollar.
Market participants are now waiting for the earnings reports of major issuers to be released this week as a key indicator. Reports from giants like TSMC, ASML, and several major Wall Street banks are expected to provide a clearer picture of the technology industry's prospects, particularly artificial intelligence (AI), amid global economic uncertainty.
