Asian stock markets experienced a marked downturn on Friday, driven by a significant slump in Japan’s Nikkei 225 index. The sharp decline came as heavy selling in technology and artificial intelligence-linked stocks unnerved investors. The Nikkei tumbled 5.8%, closing below the 63,000 threshold. Meanwhile, Taiwan’s market saw a similar fate with a loss exceeding 5%, while Hong Kong’s Hang Seng index dropped 2% and China’s Shanghai Composite fell 1.6%. Australia’s S&P/ASX 200 also edged down 0.7%.
Technology stocks have been under increasing pressure lately as concerns mount over rapidly escalating valuations in the artificial intelligence sector. Investors are growing wary, questioning whether the demand for advanced chips and memory products can sustain itself if AI fails to meet the anticipated profits and productivity improvements. This skepticism has led to a broader re-evaluation of technology stocks, impacting markets globally.
In the U.S., the Nasdaq Composite also faced headwinds, falling 1.5% on Thursday. The decline was largely attributed to losses suffered by major chipmakers. Nvidia saw a decline of 2.4%, while Micron Technology, SanDisk, and Western Digital similarly experienced notable drops.
Amid these market shifts, oil prices rose as heightened tensions in the Middle East sparked concerns about potential disruptions to global energy supplies, particularly affecting the Strait of Hormuz. Brent crude prices increased by 1.1%, reaching $85.13 per barrel, while the U.S. benchmark crude climbed 1.3% to $79.95 per barrel.