Asian stock markets experienced a significant downturn on Friday, primarily driven by a pronounced drop in Japan’s Nikkei 225 index. The index saw a sharp 5.8% decline, falling below the 63,000 threshold, as investors engaged in heavy selling of technology and artificial intelligence-related stocks. Following the trend, Taiwan’s market also plummeted by over 5%, while Hong Kong’s Hang Seng index decreased by 2%, and China’s Shanghai Composite slipped 1.6%. In Australia, the S&P/ASX 200 recorded a more modest loss of 0.7%.
The recent pressure on technology stocks is largely attributed to growing concerns about the rapid escalation of valuations in the artificial intelligence sector. Investors are beginning to question the sustainability of demand for advanced chips and memory products if AI technologies do not live up to profitability and productivity expectations. This skepticism has contributed to a broader apprehension across tech-heavy indices.
In the United States, the tech sector also faced challenges. The Nasdaq Composite fell 1.5% on Thursday, troubled by declines among major chipmakers. Nvidia, one of the key players, saw its shares drop by 2.4%. Other significant losses were observed in Micron Technology, SanDisk, and Western Digital, further illustrating the sector-wide impact of the growing doubts about AI-driven growth.
Amidst the tumult in stock markets, oil prices saw an upward trajectory as geopolitical tensions in the Middle East heightened. The potential for disruptions in global energy supplies, particularly through the strategic Strait of Hormuz, has raised concerns. Consequently, Brent crude prices increased by 1.1%, reaching $85.13 per barrel, while the US benchmark crude experienced a 1.3% rise to $79.95 per barrel.