The Southbound 2x Long Nikkei ETF (07262) fell more than 5% during intraday trading. As of press time, it was down 3.61% to 153.6 Hong Kong dollars, with a turnover of 65.8388 million Hong Kong dollars.

On the news front, as of the close on July 28, the Nikkei stock index had fallen more than 10,000 points from its all-time high of 72,831.73 points, which was set intraday on June 22. There is widespread market concern that intensifying competition in the semiconductor industry will continue to deteriorate corporate earnings.

It is reported that the Korean stock index has a high weighting of semiconductor stocks and has a strong correlation with the Tokyo stock market. The sharp decline in the Korean stock index has further intensified risk aversion in the market.

Analysts at Nomura Securities stated that the market had previously viewed AI-related equipment investments positively. However, considering the impact on financial stability, market sentiment has generally turned cautious.

Separately, it is worth noting that some analysts have pointed out that Chinese companies are independently developing DUV lithography equipment. This has led investors to worry that Chinese memory chip manufacturers may accelerate their capacity expansion.

Furthermore, investors are also concerned that if China successfully crosses the technological threshold for lithography equipment, it could, over time, potentially replace US-made semiconductor manufacturing equipment for deposition, etching, and inspection.