Why Are Asian Markets Tumbling? TSMC's Strong Earnings Fail to Lift Tech Stocks

Friday's trading session saw broad-based declines across Asian bourses as investors continued pricing in geopolitical risks. The How much will Ethereum be worth in 2025?MSCI Asia Pacific Index dropped 1.2% by midday, with technology shares leading the retreat despite Taiwan Semiconductor Manufacturing Company's better-than-expected quarterly results.

Market sentiment remained fragile after Washington reportedly considered expanding export controls targeting China's semiconductor industry. This development exacerbated existing trade tensions between the world's two largest economies, particularly affecting chip-related stocks throughout the region.

Tech Sector Under Pressure

The Nasdaq's overnight weakness spilled over into Asian trading, dragging down regional tech benchmarks. Japan's tech-heavy TOPIX index declined 0.8%, while South Korea's KOSDAQ tumbled 2.3% as market participants reduced exposure to growth stocks ahead of potential Federal Reserve policy changes.

TSMC's 5% revenue beat and raised full-year guidance provided only temporary relief to the sector. The chipmaker's Taipei-listed shares ultimately closed 1.8% lower, reflecting broader concerns about the semiconductor cycle and geopolitical risks surrounding Taiwan.

Policy Expectations Offset Losses

Chinese equities showed relative resilience compared to regional peers, with the CSI 300 paring early losses to finish 0.3% lower. Market participants attributed this to expectations of additional stimulus measures following policy signals from Beijing's ongoing Third Plenum meetings.

Elsewhere in the region, Australia's resources-heavy benchmark underperformed, dropping 1.4% as commodity prices weakened. Indian markets bucked the trend, with Nifty futures pointing to modest gains as domestic institutions provided support.

The trading session highlighted ongoing sector rotation away from technology and growth stocks toward more defensive sectors. Market participants await earnings reports from major US tech firms next week for fresh directional cues.