Asian Markets Mixed as Chip Stocks Fall, US Futures Rise

US futures indicated a higher opening for the week on Monday, following a sharp decline in technology stocks on Friday. The S&P 500 futures rose about 0.8%, Nasdaq 100 futures gained 1.3%, and Dow Jones futures were up 0.5%. In contrast, Asian markets were largely down, with semiconductor stocks continuing their slide. Last week, the S&P 500 dropped 1.1% and the Nasdaq 100 lost 2.5%. The Nasdaq 100 fell approximately 5.5% for the entire week, and the Philadelphia Semiconductor Index (SOX) plunged 11.4%. Israeli chip stocks trading in New York also saw significant drops, with Camtek down about 15%, Tower Semiconductor down 14.5%, and Nova down 9% over the week.

The primary market concern revolves around the financing of massive artificial intelligence investments, questioning whether data centers, servers, and electricity infrastructure will yield returns at the pace the market anticipates. In Tokyo, the Nikkei 225 index pared its losses, trading down 0.8%. Tokyo Electron, a chip equipment maker, fell 2.1%, and SoftBank Group, a major AI investor, lost 3.5%. The index has dropped about 6.5% in the last ten days.

Professor Guy Hochman from Reichman University discussed how fear and hope influence investor decisions, leading them to hold onto losing stocks, quickly realize profits, and follow herd behavior, arguing that emotions are more detrimental to portfolios than market fluctuations. The Japanese Yen traded around 158 to the dollar. Japan's Prime Minister Sanae Takaichi denied that her policies were weakening the Yen and driving up government bond yields.

In Seoul, the Kospi index extended its gains, rising 0.6%, after experiencing its worst week since 2008. SK Hynix fell 1.3%, while Samsung, after an initial 4% drop, traded flat. Taiwan's Taiex index declined 1%, with TSMC, the world's largest chip manufacturer, down 0.8%. Concerns over financing AI investments were reignited by a new model from China's DeepMind, raising questions about the actual cost of necessary chips.

As chip stocks decline, capital is shifting towards defensive stocks. In Tokyo, telecom companies KDDI and NTT, along with Tokyo Electric Power, Kansai Electric, and consumer goods maker Kao, saw gains. In Seoul, Korea Electric Power Corporation (KEPCO) and telecom firm KT also rose. Shanghai's main index edged up 0.2%, following stronger-than-expected GDP growth in China for the third quarter, which may reduce the likelihood of immediate stimulus measures from Beijing. Hong Kong's market was closed for a holiday, and Sydney's ASX 200 index rose 0.2%. Indonesia's stock market experienced the sharpest decline, with the Jakarta index plunging 5% after a previous 11.6% drop, prompted by an MSCI warning that the country might lose its emerging market status.