Asia report: Seoul leads losses as tech shares sell-off

(Sharecast News) - Asia-Pacific equity markets fell broadly on Thursday, led by sharp losses in South Korea, as a deepening technology sell-off on Wall Street weighed on regional sentiment.

Overnight in the United States, the S&P 500 slipped 0.51% for a second straight session, the Dow Jones Industrial Average rose 0.53%, and the Nasdaq Composite tumbled 1.51%, with chipmakers under heavy pressure.

Advanced Micro Devices plunged 17% after a weaker-than-expected first-quarter outlook, while Broadcom fell about 3.8% and Micron Technology slid 9.5%.

Patrick Munnelly, market strategy partner at TickMill, said "Thursday's tape looked like a simultaneous bid for 'broader growth' and a pullback in risk," noting that traders had stepped away from megacap technology stocks that had "long been treated as a safe-haven trade thanks to steady earnings," but that the attempted rotation was undermined by heavy selling across Asian technology shares.

Seoul leads broad losses across region

South Korean stocks led regional declines, with the Kospi 100 sinking 4.38% to 5,796.53 as chip and defence names sold off aggressively.

Lotte Chemical dropped 11.48%, Hanwha Systems fell 9.51% and Hyundai-Rotem slid 9.41%, reflecting the spillover from US technology weakness.

Munnelly noted that "valuation concerns and rising AI-related costs pushed MSCI's Asian technology index to a sixth straight decline," adding that "Samsung and SoftBank weighed, while South Korea's AI-heavy Kospi was hit hardest."

Japanese equities also retreated, with the Nikkei 225 down 0.88% at 53,818.04.

ROHM Company fell 9.05%, Daikin Industries declined 7.43% and SoftBank Group slid 7.01% after chip designer Arm's fiscal third-quarter licensing sales missed estimates.

Munnelly said that "softer-than-hoped results from Alphabet, Qualcomm, and Arm pressured their shares in after-hours trading, dragging US futures lower and setting Europe up for a choppy open."

Panasonic bucked the broader trend, jumping 8.41% despite reporting weaker third-quarter revenue and net profit, after adjusted operating profit rose 5.59% year-on-year to JPY 159.1bn, excluding JPY 129.3bn in restructuring costs.

The broader Topix edged down 0.09% to 3,652.41, reversing earlier gains and retreating from a record high.

Chinese markets were weaker, with the Shanghai Composite down 0.64% at 4,075.92 and the Shenzhen Component sliding 1.44% to 13,952.71.

Losses were concentrated in industrial and automation stocks, with Baiyin Nonferrous Group falling 10.04%, Beijing Sifang Automation down 10.01% and Kunwu Jiuding Investment Holdings dropping 10%.

Hong Kong stood out as the lone bright spot, with the Hang Seng Index reversing earlier losses to close 0.14% higher at 26,885.24.

Gains were led by Haidilao International, which rose 4.03%, Lenovo Group up 3.67% and WuXi Apptec higher by 3.28%.

Sydney in the red as Australia's trade surplus narrows

Australian equities declined, with the S&P/ASX 200 easing 0.43% to 8,889.20.

Neuren Pharmaceuticals fell 9.77%, Paladin Energy dropped 8.98% and DroneShield lost 8.33%.

Economic data showed Australia's trade surplus narrowed to AUD 3.37bn in December, below expectations for AUD 3.42bn but up from AUD 2.6bn in November.

Exports rose 1% month-on-month after a 2.9% fall previously, supported by steady shipments to China, Japan and parts of Europe, though weakness in metal and industrial goods exports and a strong Australian dollar weighed. Imports fell 0.8% month-on-month, signalling subdued domestic demand.

New Zealand shares were modestly lower, with the S&P/NZX 50 down 0.17% at 13,444.02.

Serko slid 4.36%, Heartland Group fell 3.52% and Fletcher Building declined 2.39%.

Greenback strengthens as oil prices slide

In currency markets, the dollar strengthened across the region, last trading up 0.26% on the yen at JPY 157.26, as it gained 0.34% against the Aussie to AID 1.4338 and rose 0.22% on the Kiwi to change hands at NZD 1.6694.

Munnelly noted that in rates and foreign exchange, "the pound and euro edged down ahead of expected policy holds from the BoE and ECB."

Oil prices fell sharply, adding to risk-off sentiment, with Brent crude futures last down 1.44% on ICE at $68.46 a barrel and the NYMEX quote for West Texas Intermediate lower by 1.49% at $64.17, although Munnelly said oil had earlier found support on "reports of setbacks in US-Iran nuclear talks, adding another macro complication."

He added that the broader liquidation across assets had been severe, with "silver plunging as much as 17% and gold falling 3.5%," while bitcoin extended losses as "risk appetite faded."

Reporting by Josh White for Sharecast.com.