Asian Stocks Retreat as Tech Selloff Weighs on Hong Kong and South Korea

Dubai | EcoPulse24

Technology Stocks Drive Broad Declines Across Asia

Asian equity markets closed lower on Friday, with technology shares leading declines in both Hong Kong and South Korea, as investors reacted to renewed weakness in global AI-related stocks and overnight losses on Wall Street.

The Hang Seng Index dropped 1.4%, or 325 points, to 22,747, extending losses as selling pressure intensified across major technology names.

Meanwhile, South Korea's KOSPI fell more than 3% to around 8,660, reversing the previous session's rally as investors locked in profits while reassessing valuations across the semiconductor sector.

Hong Kong Tech Shares Extend Losses

Technology companies led declines in Hong Kong despite continued investor interest in artificial intelligence-related listings.

The market remained cautious following the Hong Kong debut of Lingyi iTech, an Apple supplier that raised approximately HK$8.3 billion through its initial public offering.

However, the successful listing failed to offset broader selling across the technology sector.

Among the session's largest decliners were:

• Tencent (-1.4%)

• AIA (-1.8%)

• SMIC (-2.5%)

• Lenovo (-4.2%)

• Kingboard Laminates (-1.3%)

The declines were partially offset by gains in Kingboard Holdings (+0.9%) and CITIC Resources (+8.5%).

South Korea Sees Profit-Taking After Strong Rally

South Korean equities experienced a sharper correction as investors took profits following the KOSPI's 5.4% surge in the previous trading session.

The decline also reflected weaker sentiment toward global semiconductor stocks after renewed selling in major US technology companies.

Among the largest losers were:

• Samsung Electronics (more than -3%)

• SK hynix (more than -4%)

• SK Square (-7.7%)

• Hyundai Motor (-3.4%)

• LG Energy Solution (-2.7%)

• HD Hyundai Heavy Industries (-3.3%)

• Hanwha Aerospace (-4.8%)

• Doosan Enerbility (-4.6%)

US Inflation and AI Valuations Remain in Focus

Investor sentiment also remained cautious after the latest US core inflation data broadly matched expectations but reached its highest level since October 2023, reinforcing expectations that the Federal Reserve could maintain higher interest rates for longer.

At the same time, renewed weakness in large-cap US technology stocks continued to raise questions over valuations across AI-related companies, contributing to risk-off positioning across Asian markets.

EcoPulse24 Market Snapshot

Notable Movers

EcoPulse24 Analysis

Friday's declines illustrate how closely Asian equity markets remain tied to global technology sentiment, particularly developments surrounding artificial intelligence and semiconductor companies.

The selling pressure was most evident in technology-heavy sectors, where investors reassessed valuations following renewed weakness among major US technology stocks. In South Korea, the pullback was amplified by profit-taking after the KOSPI's strong rally in the previous session, while Hong Kong's decline came despite continued investor appetite for AI-related capital market activity, highlighted by Lingyi iTech's successful IPO.

Although AI-related investment remains a dominant structural theme across global equity markets, recent trading sessions suggest investors are becoming increasingly selective, with strong corporate earnings and new listings no longer sufficient on their own to sustain broader market momentum.