The Japan Times - Asian stocks mostly down as tech firms struggle to claw back losses

Tech firms took a hammering on Tuesday amid concerns about China's progress in developing AI chips and following comments by Broadcom's boss likening the AI buying frenzy to gambling.

The ructions felt in Seoul and Tokyo -- which have big tech weightings -- saw giants SK hynix and Advantest suffer huge losses, pushing them back towards levels last seen following their summer rout.

All three markets bounced early on Wednesday as the same firms provided much-needed support, but were unable to maintain momentum and Tokyo and Seoul ended lower, with traders disappointed by earnings from chip-equipment maker ASML.

The firm, a critical cog in the global economy and a bellwether for the semiconductor sector, announced a jump in third-quarter net profit and hiked its full-year sales forecast citing huge demand for AI and vowing to scale up production.

However, it warned demand was currently outstripping supply and it was seeking ways to boost capacity for 2028 beyond a 30-percent increase already announced.

Taiwan's TSMC, which makes advanced processors for companies including Nvidia and Apple, is due to report on Thursday.

Ahead of the ASML announcement, Saxo Markets' Charu Chanana said: "After a strong first half (of 2026), semiconductor stocks have come under pressure as higher bond yields, geopolitical uncertainty and concerns about the scale of AI capital expenditure have prompted investors to reassess valuations.

"The recent selloff across US and Asian chipmakers suggests that strong demand alone may no longer be enough to sustain the rally."

The results of ASML and TSMC "offer a useful health check on the AI investment cycle".

"TSMC tells us whether demand for advanced chips continues to accelerate, while ASML tells us whether chipmakers are investing in enough equipment to meet that demand."

SK hynix and Advantest ended lower.

There were also losses in Shanghai, with investors appearing unmoved by data showing China's exports picked up pace in September and soared 36.3 percent, far more than expected.

Hong Kong, Sydney, Singapore, Manila and Bangkok all fell, although there were gains in Wellington, Mumbai and Jakarta.

London opened lower but Paris and Frankfurt rose.

The gains were helped by hopes that the US Federal Reserve could avoid hiking rates further next year, after the bank's New York boss suggested the policy board could hold off after lifting once more this year.

"I haven't changed my view that it may be appropriate to have one more rate hike," John Williams told Bloomberg News in an interview.

"I don't think at this time I have any reason to believe that we would need to do more" after that.

- High bar -

All eyes are on consumer price data due later on Wednesday, which could help determine the bank's decision on whether to hike for a second successive meeting on October 28.

"The labour market is showing signs of deteriorating, while price pressures have remained above the central bank's target for more than five years," said Matt Weller at FOREX.com.

"Markets are currently pricing in about a one-in-four chance that the central bank will raise interest rates at its meeting... setting a relatively high bar to tip the (Federal Open Market Committee) toward another rate hike."

Crude prices rose as worries swirled over the Middle East crisis, with Iran stepping up attacks in the Strait of Hormuz and Houthis pressing ahead with their strikes on oil kingpin Saudi Arabia.

UK Maritime Trade Operations said four tankers were struck in the waterway on October 11, which Bloomberg said was around double the average the agency had seen the week before.

IMF boss Kristalina Georgieva warned on Wednesday about the impact of recent attacks on Saudi Arabia by Yemen's Iran-backed Houthis.

The latest round of fighting was triggered by Houthi strikes on Riyadh's international airport at the weekend, which killed 13 people and left operations suspended in the worst attack since 2015.

"The Saudi economy is important for the region and the world," Georgieva said at a news conference during the Annual Meetings of the Fund and World Bank in Bangkok.

"In that sense, these developments have potentially negative spillovers for everybody, everywhere," she said.

- Key figures at around 0715 GMT -

Tokyo - Nikkei 225: DOWN 0.1 percent at 67,744.29 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 24,330.35

Shanghai - Composite: DOWN 0.9 percent at 3,767.23 (close)

London - FTSE 100: DOWN 0.1 percent at 10,641.72

West Texas Intermediate: UP 0.3 percent at $94.39 per barrel

Brent North Sea crude: UP 0.2 percent at $105.94 per barrel

Euro/dollar: UP at $1.1205 from $1.1200 on Tuesday

Pound/dollar: UP at $1.3262 from $1.3256

Dollar/yen: DOWN at 158.26 yen from 158.32 yen

Euro/pound: DOWN at 84.48 pence from 84.49 pence

New York - Dow: DOWN 0.4 percent at 51,670.10 (close)

Y.Mori--JT