Asian Markets Open in the Red, South Korea's Kospi Plunges 5.36%

Asian-Pacific markets moved lower at the opening of trading on Thursday, following declines on Wall Street as investors took profits on technology stocks, particularly in the semiconductor sector. South Korea’s Kospi index led the regional decline, plunging 5.36% at the open. The sharp drop prompted the Korea Exchange (KRX) to temporarily halt trading for five minutes to calm market volatility, while the small-cap Kosdaq index fell 3.55%. In Japan, the Nikkei 225 index weakened by 0.70%, though the Topix managed a slight gain of 0.13%. Meanwhile, Australia’s benchmark S&P/ASX 200 index fell 0.59% in early trade. The negative sentiment in Asia followed a weak session on Wall Street. The Dow Jones Industrial Average had surged 423.46 points and touched a record intraday high before erasing all gains to close nearly flat. The S&P 500 fell 0.2% and the Nasdaq Composite dropped 0.7% as investors reduced exposure to chipmakers that had previously driven market gains. The heaviest pressure came from the semiconductor sector. The VanEck Semiconductor ETF (SMH) slumped 5.4%, while shares of Micron Technology and Sandisk each plunged more than 10%. Despite the sell-off, Ned Davis Research strategist Rob Anderson viewed the rotation out of semiconductor stocks as a healthy development for the equity market. He noted that sustained sector rotation has been a hallmark of the current bull market. Anderson suggested that a shift in investor interest towards cyclical non-commodity sectors could provide further evidence that the market is entering the second half of the year in a strong position, potentially extending the bull run well into the second half of 2026. Market participants are also awaiting the release of US employment data for June. Economists surveyed by Dow Jones expect the economy added around 115,000 jobs last month, which will provide important clues for the direction of monetary policy and the outlook for financial markets.