Asian Stocks Skid as Oil Slips and Tech Sell-Off Deepens

Quick Answer: Asian stocks skid as the Nikkei fell 2.0% and South Korea dropped 1.6%, extending a tech-led rout from last week. Falling oil and bond yields limited the losses, with Brent down 1.6% to US$108.06 a barrel. The source names no Bursa Malaysia company, so the read-across for Malaysian shareholders is indirect, through oil and AI spending.

Asian stocks skid after a tech-led sell-off last week. Lower oil prices and a rally in sovereign bonds limited the damage.

Why Are Asian Stocks Skidding Even as Oil Falls?

Asian stocks skid, Wall Street and bonds aided by oil slip — Asian markets fell as oil and bond yields eased.

Oil fell after US president Donald Trump decided to waive some sanctions on Russia. He later said a final decision had not been made.

US secretary of state Marco Rubio said the president would take up to 60 days to assess the economic impact.

Asian Stocks Skid as Oil Slips and Tech Sell-Off Deepens — Photo: Free Malaysia Today

What Did Oil and Bonds Do in This Sell-Off?

Brent futures: down 1.6% to US$108.06 a barrel
US crude futures: down 0.7% to US$100.70 a barrel
10-year Treasury yield: down 3 basis points to 5.0645%

The 10-year yield had just recorded its largest weekly fall in over eight months. Geopolitical tension and safe-haven flows from equities drove the rally in sovereign bonds.

Iran reported another tanker had hit a mine in the Strait of Hormuz.

How Deep Is the AI and Chip Sell-Off?

The PHLX Semiconductor Index shed 11.4% last week, its longest losing streak since 2008. The Nikkei lost 5.4% last week, while South Korea shed more than 14% over the same period.

MSCI’s broadest Asia-Pacific index outside Japan eased 0.3%.

My Bui, an economist at fund manager AMP, said: “Investors have long worried that AI revenues won’t be sufficient to recoup the massive upfront investment.” He added that “rising government bond yields and wider corporate credit spreads are increasing financing costs.”

Which Earnings Reports Could Move Tech Stocks Next?

Goldman Sachs expects five AI hyperscalers to lift capital spending to about US$1.2 trillion next year. Meta is one of them.

Investors are watching Meta, Lam Research, Texas Instruments, SpaceX and Tesla, with Meta reporting on Wednesday. Netflix, Procter & Gamble, General Motors and GE Aerospace also report.

Earnings are still expected to rise 30% overall, driven by tech profits.

Where Are Europe, the Euro and Gold Trading?

EUROSTOXX 50 futures fell 0.4%, DAX futures lost 0.3% and FTSE futures were flat. French political uncertainty weighed on the region.

The euro eased 0.2% to US$1.1212, close to last week’s 16-month low of US$1.1113. The dollar dipped 0.1% against the yen to 157.75.

Gold rose 0.4% to US$4,181 an ounce, helped by falling yields.

What Does This Mean for Bursa Malaysia Investors?

The report contains no Bursa Malaysia figures, so no local stock can be sized from it. Holders of Bursa-listed stocks should check their exposure to oil prices and AI-linked supply chains.

Bursa investors can use the AI Stock Analysis for Malaysians guide to track these links.

Key Takeaways

The Nikkei fell 2.0% and South Korea dropped 1.6% as tech stocks sold off.
The PHLX Semiconductor Index shed 11.4% last week, its longest losing streak since 2008.
Brent fell 1.6% to US$108.06 a barrel, and the 10-year Treasury yield fell to 5.0645%.
Meta, Lam Research, Texas Instruments, SpaceX and Tesla report earnings next.

Disclaimer: This article is for general information only and is not financial advice. Do your own research before making any investment decision.

Frequently Asked Questions

Why are Asian stocks falling when oil prices drop?

Falling oil and bond yields limited Asia’s losses, but tech stocks dragged markets lower. The Nikkei fell 2.0% after losing 5.4% last week, as the tech sector took a beating.

How much did the PHLX Semiconductor Index fall?

The PHLX Semiconductor Index shed 11.4% last week. That was its longest losing streak since 2008.

How much will AI hyperscalers spend next year?

Goldman Sachs expects five AI hyperscalers, including Meta, to increase capital spending to about US$1.2 trillion next year.

What happened to the 10-year Treasury yield?

The 10-year Treasury yield fell 3 basis points to 5.0645%. It had just recorded its largest weekly fall in over eight months.

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