Asia report: Stocks fall as AI rally runs out of steam
By Benjamin Chiou
Date: Wednesday 07 Oct 2026
(Sharecast News) - Asian stocks finished lower on Wednesday with markets in Tokyo and Hong Kong giving back some recent gains as tech stocks retreated.
The Nikkei 225 and Hang Seng fell 0.9% and 0.6%, respectively, while the STI dropped 1.6%. The KOSPI meanwhile dropped 2.0% as the AI-related rally - which powered the Nasdaq to a record close on Tuesday evening - ran out of steam.
A number of heavyweight tech stocks were providing a drag across the continent, including SK Hynix, LG Electronics, Tencent and Alibaba.
"Asian equities slipped on Wednesday as Wall Street's record-setting rally failed to generate sustained regional momentum," said Patrick Munnelly, partner of market strategy at Tickmill Group.
"MSCI's Asia-Pacific index fell 0.7%, led by technology drawdowns in South Korea and Hong Kong, while US equity futures trimmed early gains. Equity sentiment remains constructive at the index level, but narrow market breadth and multi-decade sovereign yields leave little room for positioning errors."
Australia's S&P/ASX 200 outperformed, finishing more or less flat as losses in the banking sector were outweighted by gains from mining stocks, with Evolution Mining, Northern Star Resources, PLS Group and Lynas Rare Earths among the better performers.
Over in India, the central bank raised interest rates for the first time since early 2023. The Reserve Bank of India lifted its repo rate by 25 basis points to 5.50%, as analysts widely expected, with inflation currently running close to a two-year high. Interest rates are now back where they were last November. Mumbai's Sensex fell 0.5% on the day.
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