Asian stock markets experienced a significant downturn on Friday, with Japan’s Nikkei 225 index leading the decline due to substantial sell-offs in technology and artificial intelligence-related stocks. The Nikkei plunged 5.8%, dropping below the 63,000 threshold. Taiwan’s market also suffered a loss exceeding 5%, while Hong Kong’s Hang Seng index and China’s Shanghai Composite fell by 2% and 1.6%, respectively. Meanwhile, Australia’s S&P/ASX 200 saw a more modest decline of 0.7%.
The pressure on technology stocks has been mounting in recent weeks amid growing concerns that valuations within the artificial intelligence sector have escalated too rapidly. Investors are increasingly wary, questioning whether the enduring demand for advanced chips and memory products will hold if AI does not deliver the anticipated profits and productivity improvements.
In the United States, the tech-heavy Nasdaq Composite dropped 1.5% on Thursday, primarily impacted by losses among major chipmakers. Notably, Nvidia’s shares fell by 2.4%, and other prominent companies such as Micron Technology, SanDisk, and Western Digital reported considerable declines.
Amid the stock market turbulence, oil prices saw an upward trend as escalating tensions in the Middle East heightened fears of potential disruptions to global energy supplies through the critical Strait of Hormuz. Brent crude increased by 1.1% to reach $85.13 per barrel, while the US benchmark crude rose by 1.3%, climbing to $79.95 per barrel.