Asian stock markets experienced a significant downturn on Friday, as Japan’s Nikkei 225 index led the decline with a sharp fall. The index plunged 5.8%, closing below the 63,000 level, largely driven by heavy selling in technology and AI-related stocks. Similarly, Taiwan’s market saw a loss exceeding 5%, while the Hang Seng index in Hong Kong dropped 2%, and China’s Shanghai Composite decreased by 1.6%. Australia’s S&P/ASX 200 also recorded a 0.7% decline.
The pressure on technology stocks has been mounting in recent weeks, fueled by growing concerns over the rapid rise in valuations within the artificial intelligence sector. Investors are becoming increasingly skeptical about whether the anticipated profits and productivity enhancements from AI can sustain the robust demand for advanced chips and memory products.
This sentiment was mirrored in the United States, where the Nasdaq Composite fell by 1.5% on Thursday. The decline was notably impacted by losses among major chipmakers, with Nvidia seeing a 2.4% drop. Other significant players such as Micron Technology, SanDisk, and Western Digital also experienced notable decreases in their stock values.
In contrast, oil prices climbed amid escalating tensions in the Middle East, sparking fears of potential disruptions to global energy supplies via the Strait of Hormuz. Brent crude increased by 1.1%, reaching $85.13 per barrel, while the US benchmark crude rose 1.3% to hit $79.95 per barrel.