AI Sell-Off Drags Kospi as Sluggish GIFT Nifty Previews Muted Start
Asian equities delivered a fractured performance on October 26, 2026, as an intensifying sell-off in AI chipmakers pressured South Korea’s Kospi and prompted a sluggish start for India's GIFT Nifty ahead of Big Tech earnings from Microsoft, Alphabet, and Amazon.
Global equity markets witnessed a cautious and fragmented start on Monday, October 26, 2026, as mounting skepticism surrounding heavy artificial intelligence capital expenditure triggered targeted profit-taking across semiconductor counters, dampening broader risk appetite across Asian trading floors. While Japan's benchmark averages held positive territory—with the Nikkei 225 inching up 0.23 percent and the broader Topix advancing 0.65 percent—the MSCI Asia Pacific index fell 0.2 percent and South Korea's technology-heavy Kospi shed 0.21 percent. Mirroring regional hesitancy, India's GIFT Nifty pointed toward a subdued, sluggish opening for domestic benchmark indices Nifty 50 and Sensex, as institutional market participants braced for a critical trading week defined by mega-cap corporate scorecards from Wall Street technology titans, pivotal central bank rate verdicts, and volatile commodity pricing.
AI Monetization Doubts Fuel Semiconductor Rout as Capital Rotates into Bonds
The mounting vulnerability across Asian tech hubs reflects a lingering overhang from Friday’s decline on Wall Street, where sustained selling in artificial intelligence market leaders dragged a key index tracking US semiconductor manufacturers into its longest losing streak since last November. Global fund managers and institutional desks are increasingly questioning whether the monumental multi-billion-dollar capital expenditure deployed toward generative AI hardware and data centers will translate into tangible corporate profitability in the near term. With skepticism rising over real monetization timelines, investors have begun rotating capital out of high-multiple semiconductor stocks and into safe-haven government bonds, intensifying operational pressure on technology firms to demonstrate sustainable margins and compelling enterprise demand.
Big Tech Earnings, Tripartite Central Bank Meetings, and Easing Crude in Focus
Market sentiment over the coming trading sessions will be heavily tested by a deluge of high-stakes corporate quarterly earnings, anchored by US hyperscalers Microsoft, Alphabet, and Amazon, whose forward guidance and cloud computational revenues will serve as a decisive litmus test for global tech valuations. Compounding the earnings test, global monetary policy will dominate macro screens as the US Federal Reserve initiates a three-day monetary policy gathering alongside scheduled deliberations by the Bank of Japan and the European Central Bank. While all three central banks are widely projected to keep benchmark borrowing rates unchanged, investors are parsing the Fed's communications for clues on future rate trajectories following its policy tightening earlier this autumn. Providing modest relief to import-dependent Asian economies, international crude oil benchmarks softened during early Asian hours, with Brent crude easing nearly 1 percent to $115.35 per barrel and West Texas Intermediate (WTI) shedding 1.1 percent to $102.10 per barrel, though persistent military flashpoints across West Asia continue to sustain a notable risk premium on regional energy flows.
