Asian stock markets experienced significant declines on Friday, with Japan’s Nikkei 225 index leading the downturn due to substantial sell-offs in technology and artificial intelligence-related stocks. The Nikkei plummeted by 5.8%, dropping below the 63,000 threshold. Similarly, Taiwan’s market saw a decrease of over 5%, while Hong Kong’s Hang Seng index fell by 2%, and China’s Shanghai Composite slipped by 1.6%. Australia’s S&P/ASX 200 also faced a downturn, albeit a smaller one, with a 0.7% drop.
The technology sector has been under increasing scrutiny in recent weeks as concerns grow over the rapid rise in valuations within the artificial intelligence industry. Investors are becoming more skeptical about the sustained demand for advanced chips and memory products, particularly if artificial intelligence does not yield the anticipated profits and productivity enhancements.
In the United States, the Nasdaq Composite mirrored some of these concerns, falling by 1.5% on Thursday. This decline was largely attributed to losses in major chipmakers. Notably, Nvidia saw a 2.4% drop, and other companies such as Micron Technology, SanDisk, and Western Digital also experienced significant declines.
Amid these market movements, oil prices have been on the rise, driven by escalating tensions in the Middle East. These tensions have sparked worries about potential disruptions to global energy supplies, particularly through the strategic Strait of Hormuz. Consequently, Brent crude increased by 1.1%, reaching $85.13 per barrel, while US benchmark crude saw a 1.3% rise, climbing to $79.95 per barrel.