Nikkei bounces, Kospi slides as AI capex concerns split Asian markets

The uneven unwinding of AI-linked selling across Asia was laid bare by the contrasting moves in Tokyo and Seoul. Japan's bounce was driven by a handful of large-cap names such as SoftBank, not a broad sentiment shift, while Seoul's chip heavyweights stayed under pressure from the same overnight losses in Nvidia, Intel and Micron. Rising crude prices, with Brent above $105 a barrel amid escalating Middle East tensions, added an inflation-related headwind for both export-dependent economies, especially with a busy week of central bank meetings from the Federal Reserve, Bank of Japan and Bank of England ahead. Until investors get more clarity on the durability of AI capital spending from major hyperscalers, this kind of stock-specific, index-level divergence is likely to persist rather than resolve into a clean regional trend.

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Tokyo and Seoul moved in opposite directions on the same AI concerns: SoftBank drove a Nikkei recovery, while Samsung and SK Hynix weighed on the Kospi.

Key points:

• Japan's Nikkei gained about 1% to 64,082.36 by midday, reversing early declines as SoftBank shares jumped more than 9%.
• SoftBank's recovery clawed back some of its sharp drop in the prior session, which came after AI industry leaders warned about technology risks.
• The Topix was nearly flat at about 4,057, as fresh demand for AI-related stocks dampened appetite for value shares elsewhere.
• South Korea's Kospi started about 1% lower and stayed in the red all session, dragged by falls in Samsung Electronics and SK Hynix, TraadingKey reported.
• The Kospi's slide mirrored overnight declines in US chip stocks such as Nvidia, Intel and Micron, amid fresh worries about returns on AI capital spending.
• Brent crude staying above $105 a barrel as Middle East tensions rose, plus this week's Fed, BOJ and BOE meetings, contributed to a cautious mood in both markets.

In Monday trading, Japan's Nikkei and South Korea's Kospi moved in opposite directions as investors weighed the impact of warnings from AI industry leaders about risks from the technology's rapid expansion. The Nikkei erased early losses to climb about 1% to 64,082.36 by midday, while the Kospi opened roughly 1% lower and remained under pressure throughout the session, according to TraadingKey.

The divergence stemmed from the same theme unfolding differently in each market. In Tokyo, SoftBank Group jumped more than 9%, recovering some of its sharp drop from the prior session, which occurred after Japan was the first market to be affected by the AI warnings. Investors seemed to decide it was premature to assess the speed of AI investment by major hyperscalers, backing a recovery in AI-related stocks. The Topix was nearly flat at around 4,057, as fresh buying in AI shares reduced interest in value stocks that had previously supported the index.

In Seoul, the response went the opposite direction. Samsung Electronics and SK Hynix deepened losses, pulling the Kospi down and mirroring overnight declines in US chipmakers Nvidia, Intel and Micron, driven by the same worries about AI capex returns. Both indexes are heavily exposed to the same global semiconductor and tech supply chain, explaining why a shared trigger led to opposing index-level results depending on which large-cap stocks led each market that day.

Compounding the cautious environment, Brent crude oil stayed above $105 a barrel as Middle East tensions kept rising, adding to inflation worries for both nations. Investors are also considering a busy schedule of central bank meetings this week, with the Federal Reserve, Bank of Japan and Bank of England all set to gather, capping overall risk appetite even as individual stocks saw large moves in both directions.

With AI capex sentiment still shaky and a packed calendar of central bank meetings ahead, additional stock-level divergence between Tokyo and Seoul appears more probable than a clear, cohesive regional trend in the coming sessions.