On Wednesday, June 10, Asian capital markets suffered a severe setback as major indices generally trended downward. This round of adjustment was driven by the combined effect of suddenly escalating geopolitical risks in the Middle East and profit-taking pressure in the technology sector. As renewed military friction between the US and Iran sparked risk aversion in the market, technology stocks that had briefly stabilized quickly weakened, while rising inflation expectations further suppressed investor confidence. Prior signals from the US stock market were already weak, with S&P 500 futures dipping slightly by 0.2%, shifting market focus toward the upcoming US inflation data.
The South Korean market performed particularly weakly, with the composite stock price index falling 4% in a single day, making it the leading declining market in the region. Semiconductor chip stocks, a key weighty sector, failed to sustain a brief rebound. Facing macroeconomic uncertainty, funds chose to exit high-level chip stocks on a large scale, while growing skepticism regarding the long-term logic of AI trading further exacerbated the pullback pressure on the sector.
Japanese stocks also faced pressure, with the Nikkei 225 index dropping 1.1%. The newly released May Producer Price Index saw a year-on-year increase exceeding expectations, surging to 4.2%, setting a new high in over a year. Rising fuel costs due to regional conflicts were a contributing factor, significantly intensifying market expectations that the central bank may discuss interest rate hikes at its upcoming meeting. Additionally, SoftBank Group's stock price plunged sharply, with a near 10% drop attributed to rumors that negotiations over its collateralized share financing have stalled.
Stock markets in Mainland China and Hong Kong also did not escape the downturn, with major indices recording declines of varying degrees. Mainland economic data displayed clear divergence; the Consumer Price Index increase missed expectations, reflecting that end-user demand remains weak, while Industrial Producer Prices, influenced by rising commodity costs, recorded the fastest year-on-year growth in recent years. This imbalance in supply and demand creates new obstacles for economic recovery. In Hong Kong, Lenovo Group's stock price plummeted following reports of plans to raise equipment prices, dragging down the overall performance of local tech stocks.
Beyond these major markets, the Singapore Straits Times Index also retreated, while the Australian S&P 200 Index remained largely flat. The Indian market proved relatively resilient, buoyed by news of data center cooperation agreements between local industry leaders and overseas tech giants. Currently, global investors have turned their attention to the US Consumer Price Index data to be released later, seeking further clues on the inflation trajectory and central bank policy direction to assess the depth of geopolitical conflict transmission to global economic costs.
