Asian shares declined sharply on Monday, led by Chinese mainland stocks and South Korea’s benchmark, as rising US bond yields and concerns over higher interest rates prompted a sell-off in technology and AI-related equities across the region.
Asian shares fell sharply on Monday as investors reassessed the outlook for interest rates, oil prices and risk appetite, with Chinese mainland stocks leading the decline and South Korea’s benchmark also under heavy pressure. Reuters reported that the selling was concentrated in artificial intelligence-related shares, as higher borrowing costs and renewed concern over energy prices weighed on growth stocks across the region.
The move in equities came as longer-dated US government bond yields climbed to levels not seen in years, increasing the discount rate used to value future corporate earnings and making it more expensive for companies to fund expansion. Reuters said the yield on the 30-year US Treasury rose to 5.5185%, close to its highest level since 2004, while the two-year yield was also sharply higher this month on expectations of further tightening by the Federal Reserve.
In mainland China, the pressure was most acute in technology and AI names. The ChiNext gauge, which tracks many smaller and more innovative companies, dropped more than 4%, while the Shenzhen Composite fell 3.37% and the Shanghai Composite slid 1.74%, according to the market move described by Reuters. TrustFinance also said Chinese technology shares were among the weakest in the region as investors stayed cautious amid rising bond yields and the prospect of higher rates.
South Korea’s market was hit by selling in Samsung Electronics and SK Hynix, sending the Kospi lower and at one point back towards the 6,900 level, Reuters reported. Japan’s Nikkei, which had opened higher, later reversed direction and slipped as the regional mood deteriorated. The broader pattern echoed recent analysis from market commentators who said Asian technology stocks have been vulnerable to a rotation away from chipmakers and other growth shares when bond yields rise and investors question how long the artificial intelligence rally can last.
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