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The Asian markets have gotten off to a forgettable start to the day's trade today (Thursday, October 15), with all the key indices crumbling under the pressure of the global chip sell-off rout.
Asian Markets Fall
A major selloff in global equity markets spilt into the Asia-Pacific region as semiconductor stocks fell after unexpectedly high United States inflation data reinforced market expectations that the Federal Reserve will raise interest rates further. Treasury securities appreciated on safe-haven buying, a Bloomberg report underscored.
South Korea's Kospi Index, recognised as a key indicator for artificial intelligence sector investments, experienced the most significant regional deterioration with an 8% decline as major chipmakers Samsung Electronics Co. and SK Hynix Inc. each experienced losses exceeding 8%. The Japanese benchmark, the Nikkei 225, slumped over 4% intraday, and the TOPIX slipped 2%.
Meanwhile, the GIFT Nifty at Dalal Street hinted at a negative start to the Indian markets ahead of the day's trade.
The MSCI Inc. Asia Pacific equities index declined by 2.2%, positioning itself toward its lowest closing since July.
Technology sector sentiment remained subdued, with Nasdaq 100 Index futures contracting by 0.8%. The Asian market decline followed a substantial downturn on Wall Street that pushed the Russell 2000 Index into correction territory, while a prominent index tracking United States semiconductor equities recorded its most extended consecutive daily decline since May 2025.
The most pronounced United States inflation reading in five months prompted market participants to substantially increase their expectations regarding additional Federal Reserve tightening measures, creating the possibility of supplementary rate increases despite a potential policy pause in October.
Although Treasury securities initially declined following the inflation announcement, they subsequently recovered the majority of losses as investors sought bond yields at multiyear elevated levels. The United States dollar depreciated.
Persistent United States inflation, driven by sustained elevated crude oil valuations following the commencement of Middle East hostilities, is generating expectations of more pronounced Federal Reserve tightening actions.
The AI Crunch
Concurrently, equity markets are experiencing downward pressure following an exceptional appreciation in artificial intelligence-related equities, concluding the United States market's most extended period of stability since the emergence of the Covid-19 pandemic.
Treasury securities amplified their gains at the commencement of Asia-Pacific trading as the equity market selloff generated heightened demand for safe-haven investments. Yields on the benchmark 10-year Treasury notes decreased six basis points to 5.12%, whereas yields on policy-responsive two-year Treasury securities declined seven basis points to 4.73%.
Gold rebounded following a three-day period of losses to trade at approximately $4,140 per ounce. Although the international crude oil benchmark Brent declined 1.1% to $104.94 per barrel, sustained elevated petroleum prices contributed to the elevation of the United States September consumer price index.
Also Read: Global chip-stock rout deepens as rate fears collide with AI funding woes
