Tech Sector Rout Triggers Broad Selloff Across Asian Markets

Equity markets in Asia faced significant headwinds on Monday as investors reassessed valuations in the technology space amid a backdrop of weakening economic momentum from the region’s largest economy. The reversal in tech equities, coupled with disappointing macro data, sparked selling pressure that reverberated through bourses from Shanghai to Seoul.

China Weighs on Regional Sentiment

Chinese equities bore the brunt of the selling, with the Shanghai Composite Index contracting 0.6 percent to settle at 3,867.92, while Hong Kong’s Hang Seng Index descended 1.3 percent to 25,628.88. The decline was fueled by multiple headwinds: property sector stress intensified as bondholders of China Vanke rejected an extension proposal on debt payments, signaling deteriorating confidence in the sector’s recovery prospects.

Economic releases failed to inspire confidence. Industrial production growth decelerated to 4.8 percent year-on-year in November, disappointing consensus forecasts of 5.0 percent and marking a pullback from October’s 4.9 percent. The consumer-facing weakness proved even more pronounced, with retail sales advancing just 1.3 percent annually—a sharp miss against expectations for 3.0 percent growth and a notable deceleration from the prior month’s 2.9 percent. Investment activity contracted, with fixed asset investment sliding 2.6 percent year-on-year versus forecasts for a 2.4 percent decline. The unemployment rate remained stable at 5.1 percent.

Tech Contagion Spreads Eastward

Japan’s equity markets experienced acute pressure as technology shares tracked their U.S. counterparts lower on valuation concerns. The Nikkei 225 Index plummeted 1.3 percent to 50,168.11, though the broader Topix Index managed a marginal 0.2 percent advance to 3,431.47. Within the tech space, semiconductor equipment maker Advantest plunged 6.4 percent, software giant SoftBank Group surrendered 6 percent, and Tokyo Electron retreated 1.1 percent.

A bright spot emerged in the banking sector, where Mitsubishi UFJ Financial and Sumitomo Mitsui Financial both surged over 2 percent on the back of an encouraging Tankan survey that reinforced expectations for a Bank of Japan rate hike later in the week.

Semiconductor Weakness Hits Seoul

South Korean shares experienced notable losses as the artificial intelligence euphoria that has driven recent gains began to fray. The Kospi declined 1.8 percent to 4,090.59, with semiconductor heavyweights bearing the brunt: Samsung Electronics fell 3.8 percent and SK Hynix shed 3 percent after chipmakers Broadcom and Oracle signaled disappointing AI-related margin outlooks. One bright spot materialized as Korea Zinc shares rallied 4.9 percent ahead of a board session to evaluate plans for an ambitious new smelter facility in the United States.

Australian Pullback From Recent Highs

Down Under, equity benchmarks retreated as mining shares consolidated gains from the prior session’s record close. The S&P/ASX 200 Index declined 0.7 percent to 8,635, mirroring losses in the broader All Ordinaries Index, which finished 0.7 percent lower at 8,923.80.

Across the Tasman Sea, New Zealand’s S&P/NZX-50 Index eked out marginal gains, finishing at 13,408.14 despite services sector indicators slipping further into contractionary territory during November.

U.S. Tech Selloff Accelerates

U.S. equity markets experienced pronounced weakness as the technology rotation intensified. The Nasdaq Composite fell 1.7 percent as investors trimmed positions in high-growth stocks that had benefited from artificial intelligence momentum. The S&P 500 declined 1.1 percent while the Dow Jones Industrial Average edged down 0.5 percent.

The selling was underpinned by rising Treasury yields following dovish concerns expressed by Chicago Federal Reserve President Austan Goolsbee, who cautioned against prematurely assuming inflation would prove transitory and emphasized the risks of aggressive rate cut frontloading. The combination of valuation concerns and macro uncertainty triggered a pronounced rotation from growth-oriented technology shares into value-oriented equities.

Commodity Dynamics

In commodity markets, gold climbed nearly 1 percent to touch a seven-week peak amid dollar weakness ahead of critical U.S. employment and inflation data releases and an anticipated series of central bank decisions scheduled for the week. Oil prices edged higher as Venezuelan supply disruptions provided support despite concerns over potential oversupply conditions entering the new year.