Chip names worsen in Asia with Kospi -10% amid CN DUV comp, KR ETF regs

Asia market update: Chip names worsen in Asia with Kospi -10% amid CN DUV comp, KR ETF regs; Hynix Q2 tomorrow; All Quiet on the Iranian Front, with deal ‘still on table’; CXMT -5% post-IPO; RBA Gov Bullock non-committal; Big CBs & Big Tech earnings pick up this week.

General trend and developments

- Big Korea-US tech deals announced over the weekend were met with a flat market response in Asia on Monday and then after weak chip performances out of the US overnight Asia’s tech complex fell heavily from the open: Kospi -10% and Nikkei -4% with chip-relateds Hynix -13%, Samsung -12%, and in Japan Tokyo Electron -11%, Kioxia -18%, Softbank -6%. (Note: Kospi has now fallen from 9,250 in June to barely hang on to 6,000 handle today). Hynix Q2 will come out before the Kospi open on tomorrow morning (Wed).

- Part of the fall in both the US as well as Asian names may well be influenced by the overnight news that China has begun mass production of its long-missing core piece of chip-making technology, DUV (Deep Ultraviolet) tools [long-dominated by Holland’s ASML] and is said to be targeting production of up to 5 DUV machines this year and 20 by 2027.

- Korean mood not helped by market regulators (FSC) continuing to clamp down on ETF margins and individual caps, following the outsize volatility since the introduction of 18 single-stock ETFs based on Samsung and Hynix - all debuting after May 27th. (Note that all further planned single-stock ETFs have been halted for now). Also coming up on Friday in South Korea (July 31st) the market is waiting for the implementation of basic deposit requirements on ETFs.

- Shanghai and Hang Seng gave back some of yesterday’s again, with Chinese AI stocks under pressure; CXMT -3% the day after IPO, while GLM5.2 model maker Z.AI / Zhipu -18%, MiniMax -6%.

- Windfall profits from CXMT’s hugely successful IPO yesterday; China's Anhui province's capital city Hefei made a $192B profit from its 2016 investment in the then start-up - one of the largest state-backed investment payouts in tech history. Meanwhile the founder of AI model-maker DeepSeek also said to make windfall profits through his hedge funds on CXMT.

- The tentative calm in the Middle East continues for now, not just in the Persian Gulf, but also in the Red Sea between the Houthis and Saudi Arabia. Pres Trump added that “There is a chance we could make a deal with Iran; Iran wants to meet and we're meeting”. WTI front FUTs down another -2% in Asia down to the $80 handle.

- RBA Gov Bullock’s talk at the annual Anika Foundation event was non-committal but warned whether hikes to date are enough to slow inflation. Post-speech AU 3-yr yields turned down by -6bps and AUD lost -0.4%.

- Japan’s PM Takaichi is waiting for her panel’s recommendation on the lowering of the 8% food tax to decide the amount and time period to be put forward in a bill. Japan’s PM reiterated that inflation remained the top priority. Comes as a Japan panel considers revising up the minimum wage (current target is for ¥1,500/hr) to 'high ¥1,100 range' (currently ¥1,121/hr).

- Japan’s Fin Min Katayama appeared to walk back her comments a few weeks ago when she suggested Japan’s GPIF and other pension funds could increase their allocation towards Japanese domestic assets and the govt’s 2040 growth plan, by admitting she was “aware” that the GPIF needs to follow rules for portfolio changes. Comes after overnight comments from the GPIF itself, stating rather bluntly that “GPIF manages assets only for beneficiaries long-term benefit“. Katayama also once more underscored BOJ independence in another sign the govt is taking a softer approach to policy statements, at least verbally for now. Japanese yields a touch softer for the second day running after last week’s extensive rise, with 5-year JGBs hitting a contract high of 2.05% on Friday.

- In trade news, USTR Greer said that tariffs have no impact at all on interest rates. Threatened further tariffs on the “excess capacity” probe. All coming as the US probes Chinese factories in Vietnam even as China says the US is committed to cap replacement tariffs on China goods at 20% and says there is “no direct link” between subsidies and overcapacity.

- Still waiting for end-July China Politburo and any further economic/AI support; Typically no advance warning until the official news or policy readouts is released.

- In a light macro data day for Asia, South Korean July Consumer Confidence inline and remaining healthy while Singapore June Industrial Production fell sharply for the month, dragging the y/y figure down by two handles.

- Nvidia reportedly behind previously undisclosed $50B lease on a Texas data center that will use it's chips - FT.

- US equity FUTs -0.3% to -0.8% during Asia trading

Looking ahead (Asian-weighted focus, using Asian time zone)

-Tue July 28th: (Tue night, US Jul Consumer Confidence).

-Wed July 29th: AU Jun + Q2 CPI, (Wed night, US Fed Rate Decision).

-Thu July 30th: NZ July ANZ Business Confidence, EU Prelim Q2 GDP, (Thu night, UK BoE Rate Decision, US Jun Core PCE, Prelim Q2 GDP).

-Fri July 31st: KR Jun Industrial Production & Retail Sales, JP July Tokyo Core & CPI, JP Jun Retail Sales & Prelim Industrial Production & Unemployment Rate, AU Q2 PPI, CN July PMIs, JP BoJ Rate Decision, TW Prelim Q2 GDP, HK Prelim Q2 GDP, EU Prelim Jul CPI.

-Sat Aug 1st: OPEC Meeting.

Holidays in Asia this week

- Tue July 28th: Thailand.

- Wed July 29th: Thailand.

Headlines/economic data

Australia/New Zealand

- (AU) ASX 200 opens -0.4% at 8,860.

- (AU) RBA Gov Bullock: Key question is whether hikes to date are enough to slow inflation - "Monetary Policy in an Era of Shocks" at the Anika Foundation Fundraising Lunch.

- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 71.2 v 75.6 prior (lowest rating since mid-June, 2026).

- (AU) Australia PM Albanese: looking at building a new oil refinery; The Perdaman facility could be the first new large-scale petrol refinery built in Australia since the 1960s.

- (AU) Pilbara Ports: FY26 exports and imports at 804.1Mts.

- (NZ) New Zealand Jun Filled Jobs M/M: 0.1% v 0.3% prior.

China/Hong Kong

- (CN) Shanghai Composite opens -0.9% at 3,823; (HK) Hang Seng opens +0.3% at 25,271.

- (CN) Reportedly China has begun mass production of DUV (Deep Ultraviolet) chipmaking tools, targeting production of 5 DUV machines this year and 20 by 2027 - The Information [EU market close].

- (CN) China's Anhui province gains $192B windfall profit on Chinese DRAM-maker CXMT listing yesterday - US financial press.

- (CN) Follow Up: China reportedly says US committed to cap replacement tariffs on China goods at 20% - US financial press.

- (CN) US may have to allow imports of China minerals as US miners and processors are not ready by Jan 2027 deadline – financial press [update].

- (CN) China's President Xi meets with Slovakia's President.

- (CN) China bond rally is not a sustainable ‘bull run’ as of yet – Chinese press.

- (CN) US Congressional group plans annual visits to China after trade trip – SCMP [update].

- (CN) China PBOC sets the yuan mid-point at 6.7928 v 6.7911 prior.

- (CN) China PBOC Open Market Operation (OMO): Sells CNY306B in 7-day Reverse Repos; Net injects CNY53B v drains CNY73B prior.

- (HK) Zhongji Innolight [3308.HK]: Announcement of offer price was determined at HK$980.00/H-share v HK$1,010 maximum price - filing.

Japan

- (JP) Nikkei 225 opens -0.7% at 64,501.

- (JP) Japan PM Takaichi: Inflation remained the top priority' aim for diet session was to fulfill election pledges; Must exit excessively tight fiscal policy, boost domestic investment and put economy on growth path - press briefing [EU market close].

- (JP) Japan Fin Min Katayama: Taking price relief measures one after another; Foreign banks' participation in projects under Japan's $550B US investment scheme wipes out concerns about dollar funding - speaks at LSEG event in Tokyo.

- (JP) Japan panel eyes revising up minimum wage target (currently ¥1,500/hr); Considering hiking min wage to 'high ¥1,100 range' (currently ¥1,121/hr) – press [EU market close].

- (JP) Japan Pension Fund GPIF President Uchida: Working on advancing AI use and risk management [EU market close].

- (JP) Japan GPIF said to manage assets only for beneficiaries long-term benefit - press [EU market close].

- (JP) Japan Defense Min Koizumi said to be considering attending a London meeting regarding Strait of Hormuz - Kyodo [EU market close].

- (JP) Japan Trade Min Akazawa: Mulling US bank financing for US investment projects.

- (JP) Japan PM Takaichi to give consumption tax order as soon as Thursday 23rd July, 2026 - Asahi.

- (JP) Japan Chief Cab Sec Kihara: Will not prejudge outcome of sales tax cut discussions (on food).

- (JP) Japan securities dealers [JSDA] plan to expand disclosure of corporate bond trades – Nikkei [update].

- (JP) Nikkei 225 FUTs -2.2% in early trade.

Korea

-(KR) Kospi opens -5.0% at 6,400.

-(KR) South Korea Kospi further extends declines by -10%, led by Hynix and Samsung Electronics.

-(KR) FSC Chairman: South Korea may prepare extra ETF measures including individual cap; may raise ETF requirements if demand does not cool.

-(KR) South Korea July Consumer Confidence: 106.8 v 106.6 prior.

-(KR) Korea Exchange activates sidecar following Kospi falling by -5%, programme trading halted for five-minutes.

-(KR) Korea Exchange activates sidecar on Kosdaq, programme trading halted for five-minutes.

-(KR) Korea Exchange activates a circuit breaker following Kospi index falling by -8%, programme trading halted for twenty-minutes.

-(KR) Korea Exchange activates a circuit breaker on the Kosdaq, programme trading halted for twenty-minutes.

Other Asia

-(TW) SMCI Taiwan Prosecutors have detained another suspect in the probe related to the co. and illegal exports of its AI servers to China - US financial press.

-(ID) S&P expects Indonesia's fiscal, external pressures to ease in coming months - emailed comment.

-(TW) Taiwan Jun Monitoring (Leading) Indicator: 41 v 39 prior [EU market close].

-(TW) China has delayed the film related to the battle for Taiwan after nationalist debate - Press [update].

-(ID) IDX Indonesia bourse adds Indika, Trimegah Bangun to LQ45 Index.

-(MY) Malaysia Central Bank (BNM) Gov Rasheed: Growth set to remain firm and inflation is manageable; notes GDP growth might be at the upper end of 4-5% forecast.

-(MY) Malaysia Econ Min Akmal: Must continue shifting from low-cost, labor-intensive activity to innovation-driven economy.

-(PH) Philippines Central Bank Gov Remolona: Big inflation impact seen in 2027, 2028.

-(SG) Singapore to scrap the 15-month wait-out period for private home owners.

-(IN) USD/INR India RBI likely selling dollars to support Rupee - traders.

North America

-(US) USTR Greer: [On interest rates] Tariffs have no impact at all [on interest rates]; tariff rates are pretty similar to past tariffs - Interview on Fox News.

-(US) US probes Chinese factories in Vietnam, stoking new levy fears - US financial press.

-(US) NVDA Nvidia said to be behind previously undisclosed $50B lease on a Texas data centre that will use it's chips - FT.

-(US) Treasury $70B 5-Year Note Auction draws 4.408% v 4.200% prior; Bid-to-cover ratio: 2.28 v 2.35 prior and 2.38 over the last 12 auctions [US market close].

-(US) Treasury $69B 2-Year Note auction draws 4.315% v 4.071% prior; Bid-to-cover ratio: 2.66 V 2.64 prior and 2.58 over the last 12 auctions [US market close].

-(US) Jun Preliminary Durable Goods Orders: 0.3% v 1.8%e; Durables (Ex-transportation): 0.6% v 0.8%e [US market close].

-(US) Atlanta Fed GDP Now: Cuts Q2 GDP estimate to 1.6% (prior 1.7%) [US market close].

-(US) July Dallas FED Manufacturing Activity: 1.3 v 2.0e [US market close].

-(US) Pres Trump to meet with Ukraine Pres Zelenskiy at 09:30am ET Tuesday; Israel PM Netanyahu 11:00am ET.

-(US) Pres. Trump: The New York Times failed again in effort to block our lawsuit; Will continue to hold mainstream media accountable for dealing in fake news.

-(US) BA FAA: Seats on hundreds of Boeing 737 MAX aircraft were incorrectly installed; the proposed airworthiness directive would apply to 453 jets registered in the US [it is not clear if international operators will be impacted].

-(BR) Brazil requests consultations with the US under WTO's dispute settlement system - Statement.

-(MX) VMC Mexico: Analyzing arbitration court ruling on Vulcan.

Europe

-(CH) Swiss National Bank (SNB) reportedly set to keep interest rate at zero until end of 2027 - financial press [EU market close].

-(DE) Germany July IFO Business Climate: 86.6 v 86.0e; Current Assessment: 86.5 v 87.3e; Expectations Survey: 86.7 v 84.7e [EU market close].

-(EU) ECB's Kazimir (acting Slovakia member) noted that a September rate hike was likely needed even if outlook improved; ECB must tighten more than expected if Mid-East crisis worsened and needed to act before second-round effects emerge [EU market close].

-(EU) Euro Zone Jun M3 Money Supply Y/Y:3.3 % v 3.3%e [EU market close].

-(UK) July BRC Shop Price Index Y/Y: 0.9% v 1.1%e.

-(IE) Ireland July Consumer Confidence: 61.6 v 62.2 prior.

Middle East

-(IR) US Pres Trump: There is a chance we could make a deal with Iran; Iran wants to meet and we're meeting; We're having good talks and there's a good chance that something will happen through our negotiations [US market close].

-(IR) Iran has executed 2 men over charges related to the protests in Jan - US financial press.

Levels as of 01:20 ET

Nikkei 225 -4.1%; ASX 200 +0.5%; Hang Seng -0.3%; Shanghai Composite -1.3%; Kospi -10.6%.

Equity S&P500 Futures -0.3%; Nasdaq100 -0.8%; DAX +0.1%; FTSE100 -0.3%.

EUR 1.1380-1.1362; JPY163.84-163.60; AUD 0.6999-0.6963; NZD 0.5782-0.5762.

Gold -0.8% at $4,043/oz; BTC -3.0% at $63,527; WTI Crude Oil -1.3% at $81.50/bbl; Copper -0.9% at $6.3380/lbs.