Asian equities slid Tuesday morning, with Korean markets leading losses amid growing worries over spending linked to the artificial-intelligence boom.
Chip and technology stocks dragged stock markets lower across Asia after the U.S. Philadelphia Semiconductor Index fell 2.2% on Monday, extending a selloff into a third straight session and taking the index's cumulative loss over the period to more than 7%.
"Sentiment toward the semiconductor sector was also hit by a report that a Chinese state-backed company had begun mass-producing deep ultraviolet lithography chip-making equipment, potentially increasing competition with foreign suppliers," Commerzbank Research analysts said in a note.
Technology news publication The Information reported that a Shanghai-based company had started making a homegrown version of machines that are used in chip manufacturing.
South Korea's Kospi led declines across the region, falling 7.7%, with chip-making index heavyweights SK Hynix slumping 11% and Samsung Electronics dropping 8.7%. Korea Exchange briefly suspended trading in both the main Kospi index and the tech-heavy Kosdaq. Japan's Nikkei Stock Average declined 3.8%, with memory-chip manufacturer Kioxia Holdings sliding 15% and semiconductor manufacturing equipment maker Kokusai Electric falling 12%.
Singapore's FTSE Straits Times Index shed 0.5%, Malaysia's FTSE Bursa Malaysia KLCI lost 0.3% and China's Shanghai Composite Index was down 0.9%. Meanwhile, Hong Kong's Hang Seng Index rose 0.4%.
"Investors remain concerned about the scale of AI-related spending and whether the rapid increase in [capital expenditure] would translate into sufficient returns," the Commerzbank analysts said.
Meanwhile, crude oil futures fell Tuesday as the pause in the U.S.-Iran conflict continued. President Trump told reporters aboard Air Force One on Monday that there was a "good chance that something good could happen" with Iran.
Trump had paused a major escalation in the military campaign against Iran amid efforts to revive diplomacy to open the Strait of Hormuz and a debate over the impact of declining munitions stocks, The Wall Street Journal reported.
"The resumption of oil exports out of the Caspian Pipeline Consortium terminal on Monday after being closed last week, added another point of relief for oil markets," said John Oh, sustainable and energy economist at Commonwealth Bank of Australia, in a note.
Front-month West Texas Intermediate crude oil futures fell 0.9% to $81.84 per barrel and front-month Brent crude oil futures dropped 0.7% to $87.76 a barrel, ICE data showed.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
July 27, 2026 21:53 ET (01:53 GMT)
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