Where Asia Closed Yesterday

Asia split into two camps on Wednesday. The semiconductor belt outperformed — Taiwan’s TAIEX climbed 1.34% and South Korea’s KOSPI added 0.74%, both riding continued AI infrastructure demand. Singapore’s Straits Times Index gained 1.24%, its strongest session in weeks. Australia’s ASX 200 edged up 0.34%.

The other side of the ledger was less forgiving. Shenzhen’s Component Index dropped 1.42%, the sharpest fall in the region, as mainland tech and growth names gave back recent gains. Hong Kong’s Hang Seng fell 0.95%, with property and consumer discretionary dragging the index lower. India’s Nifty 50 slipped 0.79%. Japan’s Nikkei 225 dipped 0.18% — a narrow loss but one that snapped a two-session winning streak. Shanghai managed a flat close at +0.07%, doing little to offset Shenzhen’s weakness. New Zealand’s NZX 50 lost 0.15%.

The divergence between Taiwan/Korea (chip demand beneficiaries) and China/Hong Kong (policy uncertainty drag) has been the dominant theme this week — and tonight’s US session may widen it further.

US Overnight Snapshot

Wall Street had a rough session. The Nasdaq Composite dropped 2.15% and the S&P 500 fell 1.21% as mega-cap tech names came under pressure. Headlines flagged S&P 500 sell signals from options markets, with traders positioning for sharp moves in Apple, Meta, and Microsoft ahead of earnings. ServiceNow fell after its results, with analysts warning that a new AI competitive threat overshadowed an earnings beat.

The VIX jumped 12.38% to 18.7 — not yet at the panic threshold above 20 but clearly signaling rising hedging activity. Technology (XLK) fell 1.01% while energy (XLE) bucked the trend with a 0.30% gain, the only sector ETF in green. The Russell 2000 lost 0.58%, suggesting small-caps held up better than growth.

For Asia, the Nasdaq selloff is the headline that matters. TAIEX and KOSPI outperformed yesterday on AI hardware optimism — that trade gets tested at today’s open. HKEX-listed tech names face a double headwind: Hang Seng was already weak, and US tech just made it worse.

Commodity + FX Watch

Oil was the standout overnight — WTI crude surged 6.08% to $92.10, a move that will ripple through Asian energy names. ASX-listed producers like Woodside and Santos could see a bid at the open, and Japanese refiners may also catch a lift. The spike comes despite earlier headline consensus that the feared oil surge “never showed up.” It just did.

On the other side, copper fell 1.81% and gold dropped 2.31% to around $4,050. The copper weakness will weigh on ASX miners — BHP, Rio Tinto, and Fortescue are the obvious names under pressure. Gold’s drop adds a headwind for Newmont and Northern Star.

In currencies, USD/JPY rose 0.47% to ¥164, keeping the yen on the back foot. Exporters in the Nikkei may find some support there. AUD/USD slipped 0.16% to 0.699, hovering just below the psychological 0.70 handle — not catastrophic, but the combination of weaker copper and a soft Aussie dollar isn’t a great setup for ASX materials.

What to Watch Today

• HKEX tech at the open. Alibaba unveiled its new Qwen AI model overnight, which could provide a floor for its Hong Kong-listed shares even as the broader US tech selloff weighs. Watch whether Alibaba decouples from the Hang Seng’s broader weakness.
• Trump’s new tariff wave. Fresh global tariff rates were announced overnight. The details matter for export-heavy markets — Korea, Taiwan, and Japan all have direct exposure. If rates target semiconductors or electronics, the TAIEX and KOSPI momentum from yesterday reverses fast.
• ASX energy vs. materials split. With oil up 6% and copper down 1.8%, the ASX could see a sharp sector rotation at the open. Energy should lead, materials should lag — the question is whether net index direction follows the bigger weight (materials).
• VIX trajectory into the weekend. At 18.7, the VIX is elevated but not extreme. If it pushes above 20 during tonight’s US session, expect Asian risk appetite to deteriorate further heading into next week.

Bottom Line

The overnight US session tilts Asia toward a risk-off open on Friday. The Nasdaq’s 2.15% drop and VIX surge will pressure the semiconductor names that carried TAIEX and KOSPI higher yesterday, while fresh tariff headlines add a layer of uncertainty for export-dependent markets. The one bright spot is the oil spike, which could give energy-heavy pockets of the ASX and Tokyo a bid. At Luna3 we’re watching whether Alibaba’s AI announcement can hold Hong Kong tech together while the rest of the region digests a weaker US lead — that divergence will tell us a lot about where conviction sits heading into next week.

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