Asia report: South Korea tech sell-off sends regional markets lower

(Sharecast News) - Asian markets were in the red on Tuesday with South Korea leading regional losses as concerns over potential overinvestment in artificial intelligence continued to dog investor sentiment.

South Korea's Kospi Index closed 3.73% lower having been down more than 4% as scepticism over AI returns hit chipmakers, with heavyweight SK Hynix closed 4% down having plunged 7% at one point. Data-center infrastructure company Elice plunged as much as 32% in its trading debut in Seoul.

"That's despite strong financials: first-half revenue tripled to around ₩34bn, while operating profit reached ₩10bn, reversing a loss a year earlier. So, the conclusion is simple: the timing is bad. The latest chip selloff has bruised investors' appetite, and the poor debut is certainly a warning for upcoming AI listings," said Swissquote analyst Ipek Ozkardeskaya.

Japanese shares finished lower amid the tech sell-off with the Nikkei down 1.16%, while China bucked the trend as the Shanhai Composite closed 0.12% higher.

Traders are worried about the debt mountain being built by AI investment amid a rise in global interest rates and government bond yields, fuelled by rising inflation caused by the US war on Iran and continuing conflict between Russia and Ukraine.

Elsewhere, Australian shares closed 0.33% lower.

Reporting by Frank Prenesti for Sharecast.com