Asian stocks fell on Tuesday, led by declines in the technology sector as investors grew cautious ahead of Nvidia’s earnings report and fresh U.S.-China trade tensions. A Bloomberg report revealed that the White House was looking to tighten Biden-era controls on chip exports to China, while Trump over the weekend called for increased scrutiny on Chinese investment in key U.S. sectors. These developments heightened fears of worsening relations between the world’s two largest economies. The sell-off in Asian tech stocks mirrored Wall Street’s overnight weakness, where investors offloaded tech shares due to a mix of profit-taking and pre-Nvidia caution. Additionally, Trump’s ongoing tariff threats, particularly a potential 25% levy on Canada and Mexico, further dented risk appetite.
Hong Kong’s Hang Seng index was the worst performer in Asia, losing 2% as the recent AI-driven rally in Chinese tech stocks lost momentum. Japan’s Nikkei 225 also dropped 0.9%, while Taiwan’s TSMC (TW:2330)—a key Nvidia supplier—shed 1.4%, pressuring the Taiwan Weighted index. Chinese stocks followed suit, with the Shanghai Shenzhen CSI 300 and Shanghai Composite down 0.9% and 0.5%, respectively. The cooling rally came after the excitement over China’s DeepSeek AI launch in late January, which had previously fueled optimism for Chinese tech.
In South Korea, the KOSPI fell 0.4%, though losses were limited by the Bank of Korea’s (BOK) decision to cut interest rates by 25 basis points, marking its third reduction in an ongoing easing cycle. However, major South Korean chipmakers still suffered, with SK Hynix (KS:000660) down 2.2%.
Elsewhere, Japan’s TOPIX dipped 0.2%, but losses were cushioned by a surge in Japanese trading houses after Warren Buffett announced Berkshire Hathaway would increase its stakes in the sector. Shares of Itochu Corp. (TYO:8001), Marubeni Corp. (TYO:8002), Mitsui & Co. (TYO:8031), Sumitomo Corp. (TYO:8053), and Mitsubishi Corp. (TYO:8058) jumped between 5% and 10%.
Australia’s ASX 200 fell 0.6%, extending losses from record highs earlier this month. Singapore’s Straits Times index was flat following a weaker-than-expected inflation reading, while India’s Nifty 50 futures pointed to a weak open as losses deepened in Indian markets. The overall sentiment in Asian markets remained fragile, with investors awaiting Nvidia’s earnings for further direction.
