TOKYO — Asian stock markets delivered mixed performance on Wednesday, dominated by a sharp 7% plunge in South Korea’s benchmark Kospi index. Mounting investor anxiety surrounding high valuation levels and profitability in the artificial intelligence sector triggered heavy sell-offs across major semiconductor heavyweights, while escalating Middle East geopolitical tensions drove global oil prices higher.

The downturn in Seoul was sparked primarily by memory-chip titan SK Hynix, whose shares cratered 12.8%. Despite reporting a record quarterly operating profit of 60.5 trillion won ($41.2 billion)—representing a sixfold increase year-over-year—the results fell short of aggressive analyst forecasts. Market leader Samsung Electronics closely followed the downward trajectory, dropping 7.7%.

By late afternoon trading in Seoul, the Kospi stood 6.8% lower at 5,616.76. The benchmark index, which had recently surged past the 9,000-point threshold, retreated to its lowest valuation level since early April. Wall Street futures also tilted lower in sympathy.

The wave of risk aversion extended across the region:

  • Japan: Tokyo’s Nikkei 225 fell 1.7% to close at 61,290.70. Chip-equipment maker Tokyo Electron sank 10.1%, while testing provider Lasertec Corp. slid 8.2%. Market sentiment was further weighed down by regional uncertainty following a powerful earthquake that hit southern Kyushu. Shares in Nippon Paper, which operates a key mill in the quake zone, slipped 1.7%.

  • Taiwan: The Taiex index slid 3.8%, heavily impacted by broader semiconductor pullbacks.

  • China & Hong Kong: Mainland China’s Shanghai Composite index dipped 0.5% to 3,793.11. Bucking the regional trend, Hong Kong’s Hang Seng index rallied 1.7% to 25,738.42.

  • Australia: The S&P/ASX 200 gained 1.0% to finish at 9,036.90.

Crude Rebounds as Geopolitical Ceasefire Shatters

Energy markets experienced renewed upward momentum as a brief three-day lull in Middle East hostilities broke down. International benchmark Brent crude jumped 3.1% to $84.58 per barrel, while U.S. West Texas Intermediate (WTI) crude surged 3.6% to $82.14 per barrel.

The price pop followed reports that Jordanian air defense forces intercepted five missiles launched from Iran early Wednesday, coming hours after the U.S. military confirmed destroying an incoming Iranian missile barrage directed at American positions. The fresh strikes renewed supply disruption fears around the strategic Strait of Hormuz—the critical maritime chokepoint through which roughly 20% of global oil shipments pass.

Wall Street Context

The sell-off in Asian tech shares reflects growing skepticism on Wall Street regarding the massive capital expenditures tied to artificial intelligence. Overnight in New York, major U.S. chipmakers suffered severe drawdowns despite a modest gain in the broader S&P 500 (+0.2%) and Dow Jones Industrial Average (+1.0%).

Memory provider Micron Technology plunged 8.9%, Advanced Micro Devices (AMD) fell 8.1%, and Applied Materials lost 7.8%, as investors re-evaluated elevated valuations ahead of key corporate earnings reports.