Asia’s major stock exchanges traded predominantly lower on Tuesday, 13 October, pressured by a fresh wave of selling in semiconductor manufacturers as doubts mounted over the valuations of companies linked to artificial intelligence. South Korea’s Kospi index led regional losses, falling close to 6%, while futures on major European indices pointed to a negative open.

The MSCI Asia Pacific index, which tracks regional equity market performance, fell more than 1%, approaching its lowest levels since August.

In South Korea, one of Asia’s key markets for semiconductor-related companies, shares in SK Hynix and Samsung Electronics declined 4.02% and 7.78%, respectively, contributing to the Kospi’s sharp drop.

The pressure on the technology sector comes at a time when investors are questioning whether heavy investment in AI infrastructure and technology will be matched by sufficient profit growth to justify the valuations reached in recent years.

Chinese competition and the approach of a new corporate earnings season are also among the factors being closely monitored by markets.

“Sentiment seems quite negative in a way we haven’t seen for some time. Buyers are stepping away and sellers are finding relatively little resistance to pushing prices lower,” said Chris Weston, head of research at Pepperstone, in a note cited by Bloomberg.

“Sellers have the upper hand across much of the AI-related trade,” he added.

Concerns also extended to the financing of AI-linked projects. According to information released, JPMorgan and Goldman Sachs decided to limit their exposure to a US$5 billion bond issuance intended to finance Volta Infrastructure, amid rising yield demands from investors.

The negative sentiment was further compounded by remarks attributed to the chief executive of US chipmaker Broadcom, who reportedly compared the artificial intelligence market to a casino.

Among the region’s major indices, Japan’s Nikkei 225 fell 1.87%, while Hong Kong’s Hang Seng and mainland China’s Shanghai Composite posted more modest declines of 0.12% and 0.05%, respectively.

In Australia, the ASX 200 ended the session virtually unchanged, proving resilient to the pressure weighing on the region’s leading technology markets.