Asia Stocks Fall on Chipmakers Ahead of TSMC Earnings
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- Asia's chipmakers led regional declines with South Korea's KOSPI plunging 6.3% on Samsung (-8%) and SK Hynix (-11%) weakness ahead of TSMC's Q2 report, while Japan's Nikkei fell 3% and only Hong Kong's Hang Seng gained ground (up 1.2%).
- TSMC is expected to notch a fifth consecutive quarter of record earnings with a 59% surge in April-June net profit, yet a JPMorgan trader said the bar to please semis investors is now extraordinarily high.
- ASML closed 0.4% lower even after raising its 2026 sales forecasts and pledging a capacity boost, a sign that strong guidance alone cannot rescue the sector's sentiment.
- Treasury bonds rallied after unexpectedly soft U.S. June PPI data priced out July Fed rate-hike risk to just 10% from 43% earlier in the month; two-year yields edged up 2 bps to 4.1493%.
- Bank of Korea raised its policy rate to 2.75% for the first time in 3½ years to stabilize the slumping won and counter persistent inflation.
- Brent crude rose 0.6% to $85.45 a barrel, extending a 12% weekly gain, as the Wall Street Journal reported Trump is leaning toward expanding U.S. military operations in Iran including deploying ground forces.
- Sterling hit two-month highs on expectations incoming UK Labour Party leader Andy Burnham will pick a fiscally conservative finance minister.
Why it matters: Asia's heavier semiconductor exposure meant it couldn't follow Wall Street's overnight rotation from chips into Magnificent Seven names, exposing how much regional indexes now hinge on a single sector's mood. With oil up 12% on the week amid reports Trump is weighing ground forces in Iran, the cooling inflation that briefly eased July rate-hike fears may be short-lived, putting the Bank of Korea's surprise hike at the front edge of a broader Asian tightening wave.
