US Tech Weakness Drags Down Asian Equities, Japan, South Korea and Taiwan Stocks Fall, Samsung Union Talks Make Progress.

Tradingkey - On May 19, the poor performance of U.S. tech stocks yesterday weighed on Asian markets today, leading to broad declines; markets are concerned about the impact of the Samsung strike on the AI industry, and with AI giant Nvidia set to release its earnings report, stock markets in Japan, South Korea, and Taiwan all fell.

Geopolitical tensions have eased as Trump announced a postponement of the military strike against Iran originally scheduled for Tuesday, May 19. Today, Iran's Deputy Foreign Minister released a draft agreement proposal to the U.S., which includes the withdrawal of American troops from the surrounding region.

KOSPI Index The index opened lower and trended downward today, closing at 7,271.66 points, a decline of 3.25%. The intraday low reached 7,141.66 points, while the high was 7,446.57 points.

Among heavyweight stocks, the decline in Samsung Electronics narrowed slightly as strike negotiations made progress; as of the close, it fell 1.96% to 275,500 KRW. SK Hynix dropped 5.16% to 1,745,000 KRW.

On the news front, Park Soo-keun, Chairman of South Korea's National Labor Relations Commission, who is mediating Samsung's wage negotiations, said Tuesday that Samsung Electronics and its labor union have narrowed some differences. Park noted that although both sides have made concessions, they remain deadlocked on two key issues, on which he did not elaborate further. This comes as the South Korean government and business community are increasingly pressuring the parties to avoid an imminent and potentially devastating long-term strike. While the strike threat has kept the country on edge, investors were encouraged by the government's weekend threat to intervene and order emergency arbitration. Emergency arbitration would block any strike action for 30 days during government-led mediation.

Nikkei 225 Index The index fell for the fourth consecutive day, closing at 60,550.59 points, down 0.44%. The intraday low hit 60,256.33 points, approaching the 60,000-point threshold.

Krishna Bhimavarapu, APAC Economist at State Street Global Advisors, stated that Japan's stronger-than-expected Q1 GDP "makes a Bank of Japan interest rate hike in June nearly a certainty." Preliminary government data showed that Japan's real GDP grew 0.5% quarter-on-quarter in the first quarter, exceeding economists' expectations of 0.4%. Bhimavarapu noted that the BoJ "appears well-positioned to act independently, underpinned by exceptionally strong domestic growth momentum, while the global AI cycle is boosting the dynamism of economies—the global AI wave is lifting all boats in the APAC region." He added that this would make the next rate hike another potential "blockbuster event" following the shift first seen in July 2024.

Yoshimasa Maruyama, an economist at Nikko Securities, said the Nikkei could reach around 65,000 points by year-end, given recent market momentum and a potential trend shift driven by a stable, long-term government. Maruyama predicts the index could reach approximately 73,000 points by the end of 2027 and around 80,000 points by the end of 2028. However, he noted: "If the Middle East conflict escalates—not just as a rise in crude oil prices, but evolving into serious supply constraint issues—the expected trajectory for asset prices, including stocks, could be revised downward."

Among heavyweight stocks, Fast Retailing rose 4.93%, Sony rose 3.45%, and Hitachi gained 2.83%; SoftBank Group fell 4.15%, and Kioxia dropped 3.27%.

Taiwan Weighted Index The index closed down 1.75% today at 40,175.56 points. TSMC fell 1.56% to 2,205 TWD.