Seoul led losses in Asia on Tuesday after Samsung shares fell sharply even as the chipmaker projected a second-quarter operating profit jump of more than 1,800%. The reaction reinforced worries that the record AI-driven rally in tech may be running out of momentum.
Wall Street had offered a more upbeat tone after all three major U.S. indexes reopened from a long weekend and climbed on gains in heavyweights including Amazon and Apple. That strength did little to steady Asian markets, where investors remained focused on whether the huge sums flowing into artificial intelligence will deliver the returns traders expect.
Samsung’s numbers were strong, but the market wanted more
Samsung said sustained AI-driven demand for memory chips should lift second-quarter operating profit by more than 1,800%. Even so, its shares dropped about 7% in early trading, pulling the Kospi down 5% and adding to a two-week slump in South Korea’s market.
| Market | Move | Latest Level |
|---|---|---|
| Tokyo – Nikkei 225 | Down 1.3% | 68,848.59 |
| Seoul – Kospi | Down 5.0% | 7,645.37 |
| Hong Kong – Hang Seng Index | Up 0.6% | 23,759.27 |
| Shanghai – Composite | Down 0.8% | 4,010.56 |
The Kospi had more than doubled this year to a record high in June, but it has since shed around 20%. That reversal has become one of the clearest signs of how quickly sentiment can turn when expectations get stretched.
Why investors are getting more cautious
Stephen Innes of SPI Asset Management said Samsung’s preliminary second-quarter numbers were “spectacular” on their face, but added that the market is now “priced for perfection. Good is no longer good enough. Even exceptional is not enough”.
He said investors are no longer just judging the last quarter. They are deciding whether the next several quarters can still beat an earnings path that has already been pushed “almost vertically higher”.
Petra Capital Management’s Albert Yong said the plunge suggests investors may have already priced in strong results and are increasingly focused on the longer-term direction of the memory cycle.
Mixed trading across the region
Losses also appeared in Tokyo, Shanghai and Wellington, while Hong Kong, Singapore, Taipei, Manila and Jakarta posted gains. Sydney was little changed, underscoring the uneven mood across regional markets.
Oil prices edged higher after UK maritime security agency UKMTO said an “unknown projectile” struck and caused a fire on an oil tanker off the coast of Oman near the Strait of Hormuz on Monday. Traders were also waiting for minutes from the Federal Reserve’s most recent policy meeting for clues on interest-rate policy as inflation remains elevated.
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