Asia’s major equity markets began the week divided between gains and losses, managing to stabilise after several sessions marked by intense turbulence — particularly in the semiconductor sector. Investors are now turning their attention to a series of quarterly earnings reports considered critical in shaping market sentiment.

The MSCI Asia Pacific index — the benchmark for Asian equities — was trading virtually unchanged from its closing level on Friday, posting a marginal gain of 0.03% with most regional markets already closed for the session. In Europe, futures trading pointed to a negative open, with the euro weakening against the majority of its G10 peers.

Last week, a broad sell-off in semiconductor manufacturers drove the sector to its worst losing streak since 2008, with the so-called ‘fear gauge’ — the VIX volatility index — spiking to its highest level since June this year. Concerns over an artificial intelligence (AI) bubble, combined with the heavy capital expenditure planned by major technology companies that may not yield short-term returns, continue to unsettle market participants.

Attention is now shifting to the quarterly earnings of heavyweights such as Tesla and Meta — the parent company of Facebook and Instagram — due this week. The results represent a new litmus test for AI-related trading, with some investors betting that accelerating inflation in the United States, alongside concerns about the sector, will amplify share price moves across the technology space.

“Ultimately, earnings will determine whether last week’s AI sector sell-off was an overreaction or a warning signal, with investors closely watching for any opportunity to re-enter the AI market for the long term,” Marc Jocum, Senior Investment Strategist at Global X Management, told Bloomberg. “The results could set the positioning for the next phase of the market recovery,” he added.

Among the region’s main markets, China’s Hang Seng and Shanghai Composite indices advanced 0.52% and 0.62% respectively, after the country’s economy grew faster than expected in the third quarter. Japan’s Nikkei 225, meanwhile, slipped 0.44%, while South Korea’s Kospi rebounded 1.39% after plunging over the previous two sessions, and Australia’s ASX 200 gained 0.44%.