Tech sell‑off triggers Asian market pullback and investor shift

JPMorgan Chase reported that technology‑focused equity hedge funds lost more than 10% in July, suggesting the tech trade could become increasingly dependent on retail investors and more volatile. The bank warned that the AI‑driven rally shows warning signs similar to the dot‑com era and recommended a rotation toward value and geographic diversification.

Asian equity markets eased on Thursday, with MSCI’s broad Asia‑Pacific index (excluding Japan) down 0.69% as technology stocks led the decline. South Korean and Japanese benchmarks fell 3.6% and 1.6% respectively, while semiconductor makers such as Samsung Electronics, SK Hynix, Kioxia and Tokyo Electron posted double‑digit drops. Oil prices remained steady in the $70‑a‑barrel range as investors watched a proposed Iran‑Oman deal that could affect the Strait of Hormuz.

Mainland Chinese investors shifted capital to Hong Kong, buying HK$62.9 billion of stocks through Stock Connect in July, while the Hang Seng Index rose 13% and the mainland Star Market fell 26%, its biggest monthly drop. Meanwhile, new A‑share account openings on the Shanghai Stock Exchange fell 7% and margin‑trading accounts dropped 22% amid the AI‑linked sell‑off.

Overall, the combined data show a broad reallocation away from high‑growth AI‑linked equities toward lower‑valuation markets and a heightened role for retail participants in the technology sector.