Asian equity markets declined sharply on 2 July 2026 as a technology sector sell-off rippled across the region, with foreign investors withdrawing a record $137bn from Asian stocks, according to Finnhub. The sell-off was linked to AI rally rebalancing, with South Korea's Kospi and Japan's Nikkei among the major indices affected. Bloomberg Markets separately reported that Japanese and South Korean semiconductor stocks fell sharply following a US technology sector rout, with the decline compounded by reports that Apple is negotiating to purchase Chinese chips, raising competitive concerns for regional chipmakers.
South Korean equities fell 6% on the session, according to Bloomberg Markets, driven in part by Meta's announcement of plans to sell computing power, which sparked concerns about AI capacity oversupply in the chipmaker sector. Samsung and SK Hynix, as major South Korean memory chipmakers directly exposed to AI-related demand, were affected by the broader Kospi decline.
The Kospi and Nikkei, as the primary benchmark indices for South Korea and Japan respectively, reflected the concentrated impact of the semiconductor sector sell-off across both markets. The Bank of Korea signalled readiness to address weakness in the won amid the broader market turbulence, while the PBOC weakened the yuan reference rate on the same day, according to Finnhub.
Sources: Finnhub, Bloomberg Markets