Zero Equilibrium® Macro and Markets Brief: Asia vs Europe Performance Charts, Sector Rotation in Action? Both Asian and European Major Indexes have seen some weakness in the week, however, Asia's exposure to AI/Hi-Tech Manufacturing has seen the regions market move sharply on the month relative to Europe below we we present a relative sectoral comparative analysis below. Sector Performance Drivers in Asian Markets (late June 2026): The intraday weakness (heavy in Japan, Korea, and China but less severe in India/Australia) is primarily driven by profit-taking and investor rotation out of AI/semiconductor/tech stocks. This is after a strong run, despite the global risk-off sentiment, valuation concerns, and some macro/geopolitical echoes. This we attribute to their core industry price and income elasticity. Key Drivers by Major Markets: - Japan (Nikkei 225: -4.09%): Tech/Semiconductors led the declines after recent AI-driven rallies. - This renewed selling in chip stocks was also experienced in the US, with tech companies taking a hit, (Apple stock suffered earlier in the week, on chips scarcity. - There has also been a rotation into defensives; e.g., pharmaceuticals, REITs, and transport benefiting from anticipated and priced in future lower energy costs, and this provided some offset - Monetary policy and Currency Exchange-ratios: The @Bank_of_Japan_e BOJ rate expectations also added pressure. - South Korea (KOSPI: -5.81%): Extreme concentration risk in semiconductors accounting for 40-45% influence. - as a result, the sharp correction from over-leveraged positions, regulatory caution on ETFs, and profit-taking in memory chips/AI supply chain, have been a recurring theme with high volatility in 2026. - China (Shanghai -2.26%, SZSE -3.44%, China A50 -3.50%) & Hong Kong (Hang Seng -1.73%): Tech/AI-related names (e.g., optical components, semiconductors) also faced heavy selling pressure despite the Micron-inspired optimism. The bearish pressure in China during the week come from soft consumption data, capital rotation away from China toward Japan/Korea AI plays, and financial and consumer discretionary stocks lagging. All these combined with the property and domestic demand headwinds that persist, exhaustively explain the weakness in Chinaibriad equity indexes. India (Nifty 50 +0.14%, Sensex +0.14%): The resilience in India is driven by; Financials/Banking, Realty, Auto, and Consumer Durables. Whilst defensive and domestic-focused sectors held up better. In line with global market trends,nIT and Metals mixed/weaker. Local institutional flows supported selective buying amid global volatility. - Australia (S&P/ASX 200 +0.18%): The S&P/ASX 209 has seen midst weekly and monthly gains, odest gains driven by; Financials, Healthcare, Consumer, and Industrials. However this has been partially offset by weakness in anchor industries (Mining/Energy, and Materials tied to commodity prices iron ore, etc.). - Indonesia (IDX Composite -2.28%): This has been one of the Asian EM markets under the most pressure (see chart 👇), declines has been driven in the past two weeks by broad-based selling across; Basic Materials, Cyclicals, Industrials, and Financials. Fiscal concerns of the current administration in their bid to increase government spending also weighed on sentiment. ZE Remarks on Asian Markets: 1. AI/Tech Fatigue: Dominant driver of declines in export-heavy tech markets (Japan, Korea, China/HK). Concentration risk amplified moves 2. Rotation: Into defensives (Financials, Pharma, Consumer staples) and domestic plays (India). 3. Macroeconomic Condition: Lower commodity/energy prices helped some sectors but hurt resources; rate expectations and global cues (U.S. tech) influential. 1/3