Asia stocks slip as chipmakers retreat; earnings, central bank meetings loom

Asian shares edged lower on Monday as concerns over the sustainability of AI spending weighed on semiconductor stocks, while investors braced for a busy week of corporate earnings and central bank decisions.

Wall Street ended lower on Friday amid surging energy prices and AI trade concerns.

U.S. stock index futures were mixed in Asian trading by 04:05 GMT, with the tech-heavy Nasdaq edging lower.

Asia chip stocks fall as key tech earnings loom

Japan's Nikkei 225 fell 0.4%, while the broader TOPIX index edged down 0.2%. Renesas Electronics (TYO:6723) and Tokyo Electron (TYO:8035) fell more than 3% each.

South Korea's benchmark KOSPI declined 1%, with Samsung Electronics (KS:005930) shares trading 1.3% lower.

In China, the blue-chip Shanghai Shenzhen CSI 300 fell 0.6%, while Shanghai Composite inched down 0.2%.

Hong Kong's Hang Seng index rose 0.5%, but most regional chipmakers were in negative territory. SMIC (HK:0981) shares slipped 2.3%, while Hua Hong Grace Semiconductor (HK:1347) dropped more than 5%.

The weakness followed a fresh sell-off in U.S. technology shares on Friday, as investors questioned whether enormous investments in artificial intelligence infrastructure would generate sufficient returns.

Investors are looking to quarterly results from major U.S. technology companies, including Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN), for evidence that rising expenditure on data centres and computing capacity is translating into sustainable revenue growth and profits.

Asia is also entering one of its busiest earnings weeks, with around 550 of the roughly 1,200 companies in the MSCI Asia-Pacific index expected to report results, according to Bloomberg data. South Korean memory-chip makers SK Hynix (KS:000660) and Samsung Electronics will be among the companies in focus.

Central bank meetings on tap; oil remains elevated

Elsewhere, India's Nifty 50 fell 0.7%, while Singapore's Straits Times Index traded 0.5% lower.

Australia's S&P/ASX 200 edged up 0.2%, while New Zealand's NZX 50 ticked 0.1% lower.

The U.S. Federal Reserve, the European Central Bank and the Bank of Japan are all scheduled to announce policy decisions this week.

The Fed is widely expected to leave rates unchanged, but investors will scrutinise its guidance for clues about the outlook for borrowing costs, particularly as elevated oil prices threaten to complicate the inflation outlook.

New Zealand's central bank is expected to raise rates on Wednesday.

The Bank of Japan is widely expected to keep its policy rate unchanged at 1.25% following its September increase.

Oil prices eased on Monday after surging to six-month highs last week, limiting some losses in equities. Brent had climbed 6.2% last week as attacks by Yemen's Houthi militants in Saudi Arabia raised concerns about supply disruptions.