Asian tech stocks experienced a sharp decline on Monday, following a more than 4.5% drop in the U.S. Nasdaq last week. Major players like Samsung Electronics and SK Hynix saw their shares fall by 10.18% and 7.68%, respectively, contributing to an 8% plunge in the Kospi Index, where these companies represent over 40% of the market.
Other notable declines included Taiwan Semiconductor Manufacturing Co. down 2.96% and SoftBank Group down 6.1%. This sell-off is attributed to a risk-off sentiment among investors, exacerbated by stronger-than-expected U.S. labor data, which has led analysts at Goldman Sachs to push back their forecasts for Federal Reserve rate cuts to mid-2027.
The downturn was triggered by disappointing revenue results from Broadcom, which negatively impacted the broader tech sector, causing significant losses in related stocks and erasing approximately $1.8 trillion in market capitalization from the S&P 500.
Despite this, UOB noted that tech and software companies will remain in focus, particularly with an upcoming IPO in the sector that could be the largest ever. The broader Asian markets also faced pressure amid escalating geopolitical tensions in the Middle East