South Korea shares fall as Asian stocks slide on global sell-off, chip rout

Published Thu, Oct 15, 2026 · 11:25 AM

A SELL-OFF in global equities spread to Asia as losses in chip stocks deepened after faster-than-expected US inflation fuelled bets that the US Federal Reserve will need to raise interest rates further. Treasuries rallied on haven demand.

MSCI’s Asia Pacific equities gauge slid 2.2 per cent, heading for its lowest level since July. South Korea’s Kospi Index – a bellwether for artificial intelligence investments – led regional losses with a 7 per cent drop as chipmakers Samsung Electronics and SK Hynix both sank more than 8 per cent.

Among the main moves across markets, S&P 500 futures fell 0.3 per cent as at 10.06 am Tokyo time. Hang Seng futures fell 1.1 per cent, Nikkei 225 futures (OSE) fell 4.2 per cent, Japan’s Topix fell 2 per cent and Australia’s S&P/ASX 200 fell 0.3 per cent.

Tech sentiment remained weak, with Nasdaq 100 Index futures falling 0.8 per cent. Asian losses followed a slide on Wall Street that pushed the Russell 2000 Index into a correction, while a closely watched gauge of US semiconductor stocks had its longest daily losing streak since May 2025. 

The fastest US inflation in five months prompted traders to ramp up bets on further Fed tightening, raising the prospect of additional rate hikes, even if policymakers pause in October.

While Treasuries initially sank after the data was announced, they recovered most of the losses on appetite for bond yields near multi-year highs. The US dollar weakened.

Stubborn US inflation, fuelled by elevated oil prices since the Middle East war broke out, is raising the prospect of more aggressive Fed tightening.

At the same time, equity markets are coming under pressure after a blistering rally in AI-related stocks, bringing the US market’s longest stretch of tranquility since before the Covid-19 pandemic to an end.

“Inflation fear has been the main character recently,” said Anna Wu, an investment strategist and founder of Floodlines Research. “With inflation moving the rate path upward, it hurts everything else.”

Treasuries extended their gains at the start of Asian trading as the sell-off in equities spurred demand for haven assets. Yields on benchmark 10-year notes fell six basis points to 5.12 per cent, while those on policy-sensitive two-year securities slid seven basis points to 4.73 per cent. 

Gold recovered after three days of declines to trade at about US$4,140 an ounce. While global crude oil benchmark Brent fell 1.1 per cent to US$104.94 a barrel, elevated fuel prices were a factor in pushing up the US September consumer price index.

Fed chairman Kevin Warsh has vowed not to steer markets with his own near-term outlook for monetary policy. But the inflation surprise will heighten scrutiny of his remarks late on Thursday New York time in Bangkok, where he is scheduled to appear in a fireside chat with International Monetary Fund managing director Kristalina Georgieva.

Markets now price about 40 basis points of Fed hikes by the end of January, with the odds of an October move also edging up.

“It’s clear as ever that inflation is stubborn and moving in the wrong direction,” said Skyler Weinand at Regan Capital. “While we expect the Fed to pause on any rate changes in October, we expect rate hikes to resume in December.”

Market attention remains firmly on tech after CoreWeave shares plunged as much as 17 per cent on Wednesday. Its debt due in 2032, which investors bought at par four months ago, traded at less than 78 cents on the US dollar.

Also, Anthropic told prospective investors its third quarter revenue hit US$16.8 billion, according to people familiar with the matter, as the AI model maker pushes ahead with plans to go public.

“The US CPI surprise and CoreWeave bond sell-off are prompting investors to reassess financing risks across the AI sector,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global. BLOOMBERG