Investing.com — Asian stocks fell on Wednesday, led by steep losses in South Korea, as a brutal selloff in technology shares extended for a second straight session ahead of key U.S. earnings and the Federal Reserve’s policy decision later in the day.
Risk appetite also deteriorated after Iran launched fresh missile attacks at U.S. forces, shattering the relative calm that had emerged around ceasefire negotiations and sending oil prices sharply higher, reviving concerns over inflation and the global interest-rate outlook.
Regional sentiment remained fragile after a mixed overnight session on Wall Street, where gains in the were offset by declines in the tech-heavy .
In Asian trading on Wednesday, Futures fell 0.6% and S&P 500 Futures slipped 0.1%. index shed roughly 3.5%.
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Tech rout deepens as Korea, Japan, China and Taiwan lead regional losses
Investors continued to reassess lofty artificial intelligence valuations, mounting capital spending commitments and intensifying competition across the semiconductor industry.
South Korea’s benchmark fell over 6% after plunging more than 12% earlier in the day, extending Tuesday’s historic rout that saw the index suffer its biggest one-day loss in nearly five months.
The benchmark has now fallen roughly 34% from its recent peak, prompting renewed debate over whether the correction could begin tightening domestic financial conditions enough to influence monetary policy, according to Nomura analysts.
SK Hynix Inc () slumped more than 12%, even after reporting record quarterly profit driven by robust demand for high-bandwidth memory chips used in artificial intelligence servers. fell more than 8%, while tumbled almost 13%.
SK Hynix was down more than 20% at its session low before trimming some losses.
Japan also remained under heavy pressure, with the falling around 1.3%, while technology and electronics names bore the brunt of selling.
and slumped more than 15%.
Separately, a powerful earthquake off Japan’s eastern coast triggered tsunami warnings across parts of the country, although authorities reported no immediate major damage to industrial facilities as officials continued monitoring the situation.
The latest weakness also reflected growing concerns that China’s rapidly developing semiconductor ecosystem could intensify competitive pressures for established chipmakers across Japan and South Korea.
Chinese equities, however, outperformed regional peers. Hong Kong’s rose about 1.5%, while gained roughly 0.5% and the edged 0.2% higher as investors rotated into domestic shares after recent underperformance across regional technology markets.
Taiwan’s technology-heavy market extended its retreat, with the benchmark falling nearly 4% as investors continued unwinding positions in semiconductor stocks.
Australia outperforms as softer inflation tempers RBA bets; focus shifts to Fed
The S&P/ASX 200 climbed to its highest level since early April after softer-than-expected inflation data prompted traders to sharply scale back expectations for another Reserve Bank of Australia rate hike.
Mining heavyweight climbed about 4.8% after reporting earnings that beat analyst expectations, reaching its highest level since July 7.
Elsewhere, Singapore’s advanced around 0.5%, supported by financial stocks, while India’s traded little changed.
Oil prices remained elevated after the United States and Saudi Arabia launched strikes on Iran-backed groups in Iraq, blaming them for recent drone attacks on Saudi oil facilities, while U.S. Central Command said it intercepted multiple ballistic missiles launched by Iran towards American forces in the region.
The renewed escalation has kept inflation concerns firmly in focus ahead of the Federal Reserve’s policy announcement later on Wednesday.
While policymakers are still widely expected to leave interest rates unchanged, markets continue to assign roughly a 33% probability to another rate hike. Attention will also focus on quarterly earnings from and .