# Asian Stocks Fall as Tech Selloff Gains Momentum

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 5 Feb 2026, 16 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/3a34ba65-6df6-4c78-ad40-b3e8002a960e/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific Asian stocks extended their slide into a second day as a retreat from tech deepened, fueled by investor anxiety over frothy valuations and the massive scale of artificial intelligence spending. For more the tech selloff, we spoke to Lianting Tu, Bloomberg's Managing Editor for Asia Equities. Plus - Rotation out of tech was the main theme during the US session and software firms saw another wave of selling, with hundreds of billions of dollars wiped off the value of stocks, bonds and loans of companies across Silicon Valley. We heard from Hartmut Issel, UBS Wealth Management Head of APAC Equities and Credit. He spoke to Bloomberg's Shery Ahn and Avril Hong on the Asia Trade. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
[0:12] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Doug Christner. Stateside,
[0:16] Speaker 2: the rotation out of tech shares gathered momentum on Wednesday.
[0:20] Speaker 2: Software firms were caught in another wave of selling. The
[0:23] Speaker 2: concern here is how AI may disrupt their traditional business models.
[0:28] Speaker 2: But today the bigger losses came among chip makers. As
[0:31] Speaker 2: one example, Advanced micro Devices down more than seventeen percent.
[0:35] Speaker 2: That came after an underwhelming outlook. Then after the bell
[0:39] Speaker 2: we heard from alphabet arm and Qualcom, to name a few,
[0:43] Speaker 2: and those shares were in various degrees of retreat in
[0:47] Speaker 2: late New York trading. Now in the Asia Pacific, it's
[0:50] Speaker 2: proving to be a kind of a rough start for
[0:52] Speaker 2: South Korean equities, and we want to take a closer look. Now,
[0:55] Speaker 2: let's bring in Bloomberg's Leon ting Iu. She is managing
[0:58] Speaker 2: editor for Asian Equities Leontam joining from our studios in Singapore.
[1:03] Speaker 2: Help me understand what you're seeing in the South Korean
[1:06] Speaker 2: equity market. In particular, I noted that there was a
[1:09] Speaker 2: lot of tech weakness over the last forty eight hours.
[1:12] Speaker 2: In the States. It seems like it's showing up in
[1:14] Speaker 2: a big way in South Korea.
[1:17] Speaker 3: Yeah, I just want to first to mention that suth
[1:19] Speaker 3: Korea was actually really resilient yesterday when the intensity in
[1:24] Speaker 3: the cell of in software shares was very severe, and
[1:28] Speaker 3: today we're seeing a bit of a pullback in Korean
[1:32] Speaker 3: chip makers. Part of reasons just overall sentiment around tech.
[1:37] Speaker 3: As you mentioned, NASTAC was down I think the biggest
[1:39] Speaker 3: two day routes since October, and a slew of earnings
[1:42] Speaker 3: you just mentioned, We're not looking too good. But I
[1:46] Speaker 3: guess for South Korea overall, the underlying tone of among
[1:51] Speaker 3: investors is still quite bullish. If you look at Quacomm,
[1:55] Speaker 3: it did miss estimates, but the highlight of the earnings
[1:59] Speaker 3: call was about memory chip shortage, right. It says especially
[2:02] Speaker 3: those handset makers in China couldn't get enough memory chips.
[2:06] Speaker 3: So that really adds to the bullishness about around these
[2:10] Speaker 3: two giant chip makers in South Korea, SAMSA and Skhex.
[2:16] Speaker 3: And so we also saw Nintendo yesterday shares plunged because
[2:20] Speaker 3: you know, the memory chip become a big issue again.
[2:24] Speaker 3: So I would say overall, yes, the techniques are not
[2:28] Speaker 3: doing too well. But the translation to the implication for
[2:31] Speaker 3: the two sous Korean chip makers is actually quite positive.
[2:34] Speaker 2: So help me understand this. If we're talking about potential
[2:38] Speaker 2: shortages of components like memory, that is obviously going to
[2:42] Speaker 2: drive up memory prices, and when you're a device maker,
[2:45] Speaker 2: you're going to have to try to make up for
[2:47] Speaker 2: that cost. Right, wouldn't that run the risk of hurting
[2:50] Speaker 2: consumer demand if device prices start to push higher.
[2:55] Speaker 3: Yeah, that's exactly the cut recalibration that is being done
[2:59] Speaker 3: by analysts, and they look at these companies like a Nintendo,
[3:03] Speaker 3: like Quacom, and like, you know, maybe shall me the
[3:06] Speaker 3: biggest cell phone maker in China. I think the overall
[3:10] Speaker 3: idea is, first of all, they may not make as
[3:13] Speaker 3: much to meet the demand just because they don't have
[3:16] Speaker 3: those memory chips. And second, yes, they will have to
[3:19] Speaker 3: pay a lot more to get these chips. For example,
[3:22] Speaker 3: for Nintendo, their current contract covers about one year of
[3:26] Speaker 3: memory chip sort of intake, but after that one year
[3:29] Speaker 3: they'll have to really pay up. That would eat into
[3:31] Speaker 3: their margins. So overall, that's why the shares were down
[3:35] Speaker 3: I believe nine percent or so for Nintendo yesterday.
[3:38] Speaker 2: So maybe we can change gears and talk a little
[3:40] Speaker 2: bit about Alphabet. Fourth quarter revenue was above forecast, but
[3:44] Speaker 2: the company did say that it plans to spend a
[3:47] Speaker 2: lot more than investors had expected this year. I think
[3:50] Speaker 2: capex is set to double now. That speaks a very
[3:54] Speaker 2: strong demand. And I understand we were just talking there
[3:56] Speaker 2: about the risk of higher prices for certain compononents like memory.
[4:02] Speaker 2: But isn't this a positive sign when you have a
[4:03] Speaker 2: company like Alphabet saying, hey, our business in AI seems
[4:07] Speaker 2: to be working well and we're going to increase capex.
[4:10] Speaker 3: Yeah, I believe. So that's why you see, you know,
[4:13] Speaker 3: the initial share plunge was I believe seven eight percent
[4:15] Speaker 3: in the post market trading, but that really rebounded. I
[4:18] Speaker 3: think Alphabet, first of all, First of all, it has
[4:21] Speaker 3: a very good track record of really making things work.
[4:24] Speaker 3: A lot of it's initiatives in the end took off.
[4:27] Speaker 3: It's Gemini model caught up really quickly to you know,
[4:31] Speaker 3: to be embedded in all sorts of Google offerings, including
[4:34] Speaker 3: the search engine as well. But also I think for
[4:39] Speaker 3: for Asia suppliers, we are I would say Asia suppliers
[4:43] Speaker 3: are actually in the very good part of the supply
[4:46] Speaker 3: chain because a lot of them are in the hardware business.
[4:50] Speaker 3: You look at the Korean chip makers, you look at TSMC,
[4:53] Speaker 3: you look at a lot of equipment chip equipment makers,
[4:57] Speaker 3: that they are the ones receiving the capex money from
[5:00] Speaker 3: the likes of Google, Meta and other hyperscalers in the US.
[5:05] Speaker 3: So I think that's why we see a lot of
[5:08] Speaker 3: analysts actually issuing very bullish calls for Asia tech names
[5:12] Speaker 3: in the broader context of global sell off because of
[5:16] Speaker 3: AI losers sort of recalibration. The Asia chip makers and
[5:20] Speaker 3: Asia hat worry makers are actually quite resilient and will
[5:23] Speaker 3: continue to be resilient in the AI trade.
[5:26] Speaker 4: Well.
[5:26] Speaker 2: Staying with the chip space for a moment, profit for
[5:29] Speaker 2: the British chip designer Armholdings was down twelve percent. That's
[5:32] Speaker 2: pretty substantial, and the company sales forecast for the current
[5:36] Speaker 2: quarter was disappointing. This company is owned ARM by soft Bank,
[5:41] Speaker 2: and I'm looking at those shares down more than five
[5:43] Speaker 2: percent right now in the Tokyo session. So there's another
[5:46] Speaker 2: level of exposure here. It's not just ARM, but it
[5:49] Speaker 2: extends out to soft Bank, right.
[5:51] Speaker 3: Yeah, SoftBank is an interesting company, right It owns a
[5:56] Speaker 3: big stake in ARM, but it also is a big
[6:00] Speaker 3: investor in open ai and open ai. As we as
[6:05] Speaker 3: I saw in a in a nice story from Bloomberg yesterday,
[6:08] Speaker 3: it became a bit of a liability for a lot
[6:11] Speaker 3: of investors' early investors in the company, including Nvidia. The
[6:16] Speaker 3: idea is just, you know, questions about whether all these
[6:20] Speaker 3: spendings can actually turn into a return fast enough to
[6:25] Speaker 3: sustain the operation of this company. So for SoftBank, I
[6:30] Speaker 3: think it's increasingly been seen as a proxy to this
[6:35] Speaker 3: open AI or AI large language models. And these are
[6:40] Speaker 3: the companies that are sort of most in question about
[6:44] Speaker 3: the valuation, about the bubble concerns.
[6:47] Speaker 2: What about markets in Hong Kong and on Taiwan, I mean,
[6:51] Speaker 2: are they are the stories similar here in terms of
[6:53] Speaker 2: the tech narrative.
[6:56] Speaker 3: Taiwan and Hong Kong, I would say quite different. Hong
[6:59] Speaker 3: Kong is very much centered around Chinese internet names, and
[7:04] Speaker 3: that sector has its own dynamics. Part of it is
[7:08] Speaker 3: the price war, especially in the e commerce and food
[7:12] Speaker 3: delivery space, that has really compressed profit margins despite government's
[7:18] Speaker 3: effort to prevent that. Second is the tax concerns. I'm
[7:24] Speaker 3: sure you sa a couple of days ago, a bunch
[7:26] Speaker 3: of these Internet or platform names dropped quite significantly because
[7:32] Speaker 3: of concerns that the tax man, the Chinese government, which
[7:36] Speaker 3: is facing a record budget deficit, is potentially adding value
[7:41] Speaker 3: added tax for these group of companies which are perceived
[7:45] Speaker 3: to be relatively more profitable than others. So that's the
[7:49] Speaker 3: latest headache for Chinese tech names in terms of Taiwan. Yes,
[7:53] Speaker 3: TSMC again is still very much well positioned in the
[7:56] Speaker 3: tech supply chain because you know, also of making with
[8:00] Speaker 3: need to go to TSMC to get that made. The
[8:03] Speaker 3: reason for TSMC to underperform these Korean chip makers is
[8:08] Speaker 3: because there is a bit of a cap for a
[8:10] Speaker 3: lot of funds to hold a single name, So TSMC
[8:15] Speaker 3: for a lot of em or Asia focused funds, they
[8:19] Speaker 3: have already maxed out the ten percent cap, so now
[8:22] Speaker 3: they're scrambling to find other ways to get exposure to TSMC,
[8:27] Speaker 3: including using some kind of esoteric swaps or going into
[8:32] Speaker 3: the structured products so it doesn't quite show up in
[8:36] Speaker 3: you know, the all sorts of disclosures. So that is
[8:39] Speaker 3: sort of the reason that is keeping a bit of
[8:41] Speaker 3: a lit on TSMC's share price.
[8:44] Speaker 2: Leon Ting, thank you so very much, great stuff from
[8:46] Speaker 2: Bloomberg's Leon ting too. She is managing editor for Asian Equities.
[8:50] Speaker 2: Joining us here on the Daybreak Asia podcast. Welcome back
[9:00] Speaker 2: to the Daybreak Asia Podcast. I'm Doug Christner. As I
[9:03] Speaker 2: mentioned a moment ago, US tech shares added to their
[9:06] Speaker 2: recent weakness during the Wednesday session, and from some additional perspective,
[9:10] Speaker 2: we caught up with Heartwood Issel. He is the head
[9:13] Speaker 2: of APAC Equities and credit at UBS Wealth Management. Heartwood
[9:17] Speaker 2: spoke with Bloomberg TV host Sherry On and April Honk.
[9:20] Speaker 5: Really a lot to digest, but the narrative right now
[9:23] Speaker 5: seems to be a continuation of that tech rotation out
[9:27] Speaker 5: of those stocks and into perhaps more value, more small sectors,
[9:31] Speaker 5: more cyclicals. Can this be seen as a positive sign
[9:36] Speaker 5: of more broadening out of the market or is this
[9:38] Speaker 5: a fundamental problem.
[9:42] Speaker 4: I think it is a sign of a broadening market,
[9:46] Speaker 4: And we also have to bear in mind, especially if
[9:47] Speaker 4: you look at MAC seven for example, over almost three years,
[9:51] Speaker 4: right they were the key component of earnings growth in
[9:54] Speaker 4: the S and P. Theyse still are one of the components,
[9:56] Speaker 4: but not the only one anymore this year, so it's
[9:58] Speaker 4: probably not so surprised that we see other sectors. Maybe
[10:02] Speaker 4: I mentioned as in particular also in the US context
[10:05] Speaker 4: that are also coming up and might many investors also see, hey,
[10:08] Speaker 4: you know where else can I diversify things a bit?
[10:10] Speaker 4: So not an unhealthy environment in my view.
[10:15] Speaker 5: Yeah, especially at a time when we saw the cell
[10:17] Speaker 5: of the software stocks when they're actually generating solid earnings
[10:21] Speaker 5: in this side of the world in the Asia, are
[10:25] Speaker 5: there any concerns around the fact that AI could cannibalize
[10:29] Speaker 5: some of these companies that are in play as well.
[10:35] Speaker 4: On the Asia side. Actually, as long as there's demand
[10:38] Speaker 4: for a it doesn't matter from whom or if the
[10:41] Speaker 4: market shares shift or anything like the market seems to
[10:43] Speaker 4: believe to some extent, and software in the stock markets
[10:47] Speaker 4: here and APEX, we don't have that kind of phenomenon
[10:51] Speaker 4: or not not that kind of structure and set up.
[10:54] Speaker 4: And therefore, and we have seen also what you mentioned Alphabet,
[10:57] Speaker 4: but we have seen it before also Microsoft et cetera.
[11:00] Speaker 4: In terms of what I look at right is cloud
[11:03] Speaker 4: growth year on year, It's very very strong, and if
[11:06] Speaker 4: it disappoints to some extent, then it's only because the
[11:08] Speaker 4: capacity isn't there, right. The demand is not a demand issue, right,
[11:12] Speaker 4: So that I think also here for the for the
[11:14] Speaker 4: asient semi conductor space in particular. Right, as long as
[11:17] Speaker 4: that roles, I don't see so many issues there.
[11:24] Speaker 6: Are you also seeing how emerging markets are sort of
[11:26] Speaker 6: breaking away from these US market moves.
[11:33] Speaker 4: Yes, indeed we are seeing it, by the way, not
[11:36] Speaker 4: only in APEX, but also in APEX, I should say,
[11:39] Speaker 4: and yes, I will see you know, especially if we
[11:41] Speaker 4: stay here quickly in our region. Right, there's different drivers
[11:45] Speaker 4: I think quite interesting, right, so so I also one
[11:48] Speaker 4: of them also for APEC I just mentioned. But then
[11:50] Speaker 4: you have value ups, right, so markets that you know,
[11:53] Speaker 4: in terms of structure don't don't really that close to
[11:56] Speaker 4: to AI R, but they're going up like a Japan
[11:58] Speaker 4: like Singapore. And then we have markets that also look
[12:01] Speaker 4: interesting again a different driver which I call sort of
[12:04] Speaker 4: the leggards of last year, where actually your earnings growth
[12:07] Speaker 4: is accelerating. Two examples India, Indonesia. So yeah, you know,
[12:11] Speaker 4: different drivers. What could be better?
[12:17] Speaker 6: Talk to us also about what you see in credit
[12:19] Speaker 6: that is related to the AI boom, because there also
[12:23] Speaker 6: seem to be some lingering concerns about the payoff in
[12:27] Speaker 6: that part of investment space. Is that something that you're
[12:30] Speaker 6: also seeing.
[12:35] Speaker 4: Yeah, we have looked at it, especially also on the
[12:37] Speaker 4: non listed side. The conclusion that we came up with
[12:40] Speaker 4: is probably where we have more flex potentially is more
[12:45] Speaker 4: like the low quality areas, which at least as far
[12:48] Speaker 4: as our investors go, right, we have several times so
[12:52] Speaker 4: I told them and recommended, right, so you know you
[12:55] Speaker 4: can go in that space. You should be in that space.
[12:56] Speaker 4: But more on the high quality side, is that as
[12:58] Speaker 4: long as that's the place where you position, that should be.
[13:02] Speaker 6: Okay.
[13:06] Speaker 5: You mentioned Japan earlier, and of course we have seen
[13:09] Speaker 5: an amazing rally given some of the structural changes in
[13:12] Speaker 5: this market. We are headed towards the election this weekend,
[13:15] Speaker 5: and that's really raising more fiscal concerns about this country.
[13:20] Speaker 5: Is there anything that you're watching in particular this weekend
[13:24] Speaker 5: that could make a meaningful difference towards the direction of
[13:28] Speaker 5: the equities are here in Japan?
[13:33] Speaker 1: Yeah?
[13:34] Speaker 4: I think generally for the market, I mean, given we
[13:36] Speaker 4: probably know what the outcome or the most most likely
[13:39] Speaker 4: outcome is that we need to watch certainly right that
[13:41] Speaker 4: also the government, right, they do the stimulation that they
[13:44] Speaker 4: do positive structural measures, but not overdo it necessarily on
[13:48] Speaker 4: the dead side.
[13:49] Speaker 5: Right.
[13:49] Speaker 4: As long as that's the case, I think it's okay,
[13:52] Speaker 4: because that, in my view is sort of you know,
[13:54] Speaker 4: something short term that could help the market. But if
[13:56] Speaker 4: I look back a bit, right, this return on equity
[14:00] Speaker 4: measures in Japan, they have started to increase. I think
[14:03] Speaker 4: that is a key reason also why why many also
[14:05] Speaker 4: foreigners go back right, these value are measures. They are
[14:08] Speaker 4: beginning to work. We see it in the data, and
[14:10] Speaker 4: it will not stop here. So, yeah, Japan is interesting.
[14:16] Speaker 6: What about Chinese tag which hasn't accently been immune to
[14:19] Speaker 6: the route in the sector that we've been seeing.
[14:22] Speaker 2: This week.
[14:26] Speaker 4: On Chinese TEG And of course in about say a
[14:29] Speaker 4: month's time or a half a month, I say we
[14:32] Speaker 4: will see more and more data also results. The ones
[14:36] Speaker 4: that I would most critically look at is a bit
[14:39] Speaker 4: like in the US with hyperscalers is the heur and
[14:42] Speaker 4: near cloud growth. So and we have seen, if I
[14:46] Speaker 4: compared to twelve eighteen months ago, we have seen a
[14:49] Speaker 4: significant increase of some of the leaders. Right, We're talking
[14:52] Speaker 4: in some cases now about thirty percent give and take right,
[14:55] Speaker 4: or even thirty plus percent here on near cloud growth
[14:58] Speaker 4: that has only come in recently and nobody has to
[15:02] Speaker 4: hide between us hyperscalers anymore. Right, it's virtually on par
[15:06] Speaker 4: and I think we're going to see also from here
[15:09] Speaker 4: several quarters of this repeating, So I would struggle to
[15:12] Speaker 4: see why the market wouldn't sort of buy into this idea.
[15:14] Speaker 2: That was hartmood Issel, head of a pack Equities and
[15:17] Speaker 2: credit at UBS Wealth Management, speaking to Bloomberg TV host
[15:21] Speaker 2: Sherry On and April Hong bringing you the conversation here
[15:25] Speaker 2: on the Daybreak Asia Podcast. Thanks for listening to today's
[15:30] Speaker 2: episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday,
[15:34] Speaker 2: we look at the story shaping markets, finance, and geopolitics
[15:38] Speaker 2: in the Asia Pacific. You can find us on Apple, Spotify,
[15:42] Speaker 2: the Bloomberg Podcast YouTube channel, or anywhere else you listen.
[15:45] Speaker 2: Join us again tomorrow for insight on the market moves
[15:48] Speaker 2: from Hong Kong to Singapore and Australia. I'm Doug Prisner,
[15:53] Speaker 2: and this is Bloomberg

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