Asian stocks sink on tech losses as rates, inflation fears mount

Investing.com-- Most Asian stocks fell on Thursday amid persistent fears of sticky inflation inviting high interest rates, with the technology sector seeing the steepest declines as investors also locked-in recent profits. 

Regional markets took a weak lead-in from Wall Street, which fell on Wednesday tracking tech losses and some weak earnings, and as fears of high interest rates remained in play before key economic readings this week.

U.S. stock index futures saw extended losses in Asian trade, with focus squarely on upcoming gross domestic product data and PCE price index data- the Federal Reserve’s preferred inflation gauge- due on Thursday and Friday, respectively. 

Tech, chipmaking stocks lead losses as AI rally cools 

Tech-heavy indexes were the worst performers in Asian trade, with Japan’s Nikkei 225, Hong Kong’s Hang Seng and South Korea’s KOSPI down between 1% and 1.5%.

An initial rally in the sector, driven by hype over artificial intelligence, now appeared to be winding down, while decreased risk appetite also saw investors lock-in recent gains in the sector. 

Major chipmaking stocks- which had the highest amount of exposure to the recent AI rally- were the biggest decliners. Japan’s Advantest Corp. (TYO:6857) slid 5.5% and was the worst performer on the Nikkei, while memory chip-making major SK Hynix Inc (KS:000660) fell 2% in South Korean trade. 

TSMC (TW:2330) (NYSE:TSM)- the world’s biggest contract chipmaker- sank 1.3% in Taiwan trade.

A key outlier in the sector was Semiconductor Manufacturing International Corp (HK:0981)- the biggest chipmaker in China. The stock jumped nearly 4% after recent data showed it had become the third-largest chipmaker in the world by foundry capacity.