Most Asian stock markets experienced declines on Wednesday, as renewed selling pressure on semiconductor shares continued this week’s artificial intelligence-driven valuation adjustment. This trend has positioned South Korea’s KOSPI close to entering a bear market, despite an initial effort at bargain hunting.Oil prices continued to be high following the United States’ recent military actions against Iran and the imposition of stricter sanctions on Iranian oil exports, which were prompted by recent assaults on commercial shipping in the Strait of Hormuz. This situation has sustained inflation worries and constrained the demand for risk assets throughout Asia.

Wall Street concluded the trading session on a downward trajectory, with Nasdaq 100 Futures and S&P 500 Futures retracing earlier advancements to decline by 0.1% during Asian trading hours. The renewed weakness follows Samsung Electronics Co Ltd’s blockbuster earnings, triggering a broad selloff across Asia’s AI supply chain on Tuesday, as investors questioned whether soaring semiconductor valuations can continue to be supported by future earnings growth. An early recovery in Asian semiconductor shares quickly dissipated, as investors once again shifted away from high-flying AI names, despite ongoing optimism regarding long-term demand.

Analysts indicated in a note that artificial intelligence is likely to continue as the prevailing investment theme through the latter half of 2026. However, purchasing decisions are anticipated to become more discerning as investors concentrate on firms that can achieve earnings growth adequate to validate current valuations following an extraordinary rally in the first half. South Korea continued to be the focal point of regional selling. The KOSPI declined by nearly 5%, positioning the benchmark on a trajectory toward a bear market, having decreased over 20% from its record high of 9,385.59 on June 19, should the losses continue until the market closes.

SK Hynix Inc slumped 6.8%, while LG Innotek Co Ltd dropped 7.4%, reversing earlier gains as investors continued unwinding positions across South Korea’s AI supply chain. Selling also extended to Japan’s technology suppliers following a short-lived morning rebound. Murata Mfg Co fell about 1%, TDK Corp lost 1.1%, while Sony Corp edged down 0.3%. The Nikkei 225 dropped 1.5% and the TOPIX declined nearly 1%.