Asian shares fell on Monday as concerns over the sustainability of AI spending weighed on chipmakers. Investors now await major U.S. tech earnings and policy decisions from the Fed, the ECB and the Bank of Japan.
Asian shares fell on Monday as doubts about AI spending hit semiconductor stocks, while investors braced for a busy week of corporate earnings and central bank decisions. Wall Street had ended lower on Friday amid surging energy prices and AI trade concerns.
Chipmakers drag Japan and South Korea lower
Japan's Nikkei 225 fell 0.8%, while the broader TOPIX index edged up 0.2%. Renesas Electronics and Tokyo Electron fell more than 3.5% each.
South Korea's KOSPI ended 1.5% lower, with Samsung Electronics shares down 1.2%. In Hong Kong, the Hang Seng index rose 0.4%, but SMIC slipped 2.6% and Hua Hong Grace Semiconductor dropped more than 5%.
Big tech earnings in focus
The weakness followed a fresh sell-off in U.S. technology shares on Friday, as investors questioned whether enormous investments in AI infrastructure would generate sufficient returns. Investors are now looking to results from Microsoft, Alphabet and Amazon for evidence that rising spending on data centres is translating into sustainable revenue growth and profits.
Asia is also entering one of its busiest earnings weeks. Around 550 of the roughly 1,200 companies in the MSCI Asia-Pacific index are expected to report results, according to Bloomberg data, with SK Hynix and Samsung Electronics among those in focus.
Fed, ECB and BOJ decisions due as oil stays elevated
The U.S. Federal Reserve, the European Central Bank and the Bank of Japan are all scheduled to announce policy decisions this week. The Fed is widely expected to leave rates unchanged, but investors will scrutinise its guidance as elevated oil prices threaten to complicate the inflation outlook.
Meanwhile, the Bank of Japan is widely expected to keep its policy rate unchanged at 1.25% following its September increase. New Zealand's central bank is expected to raise rates on Wednesday.
Oil prices eased on Monday after surging to six-month highs last week, limiting some equity losses. Brent had climbed 6.2% last week as attacks by Yemen's Houthi militants in Saudi Arabia raised concerns about supply disruptions.
Source: Investing.com
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