• MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.06% in early Asia trade while the Nikkei slid 2.8% Published July 17, 2026 Updated 17 minutes ago By Reuters SINGAPORE: Asian stocks got off to a rocky start on Friday as the drag from chipmakers weighed on global equity indexes, while oil prices were set for their sharpest weekly rise in three months as tensions in the Middle East erupted anew. Investors this week rotated out of semiconductor plays into other sectors such as banking after robust earnings from major lenders, leaving Asia vulnerable to the selloff given its heavier exposure to chips. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.06% in early Asia trade while the Nikkei slid 2.8%. Nasdaq futures lost 0.7% and S&P 500 futures declined 0.4%. EUROSTOXX 50 futures were down 0.5%. Markets in South Korea were closed for a holiday, after the government on Thursday announced it will temporarily ban new listings of exchange-traded funds (ETFs) that are tied ⁠to certain major technology firms, while raising minimum required deposits for retail investors to invest in such products, in an effort to curb volatility. “Asia’s AI trade thesis is being tested again. After a strong rally so far this year - led by semiconductors - concerns have resurfaced about potential overcapacity in the AI build-up,” said analysts at HSBC. “A tougher question is how long the AI cycle can realistically run. Are we already at the late stage of the cycle? Has it peaked? It is an important question, and the reality is that it is difficult to time the market. That said, the fundamentals still look solid.” Oil prices were on the rise, with Brent crude futures up 0.7% to $84.83 a barrel, while U.S. crude advanced 0.7% to $79.49 per barrel. The U.S. began conducting a new wave of strikes against Iran on Thursday to “further degrade Iranian military capabilities”, the US Central Command said in a statement. For the week, Brent and US crude futures were set to rise more than 11% ⁠each, marking their largest gains since April. “The US and Iran are further away from seeing eye-to-eye,” said…