Japan's Nikkei 225 led a broad Asian sell-off on Friday, sliding as chipmakers and other AI-linked shares were dumped across the region. Taiwan's benchmark fell more than 5%, and worsening Middle East tensions lifted oil prices as investors turned cautious.
Japan's Nikkei 225 plunged 5.8% to 62,945.97 on Friday after computer chipmakers and other AI-linked companies saw broad-based selling. The benchmark later closed down 4.73%, or 3,161 points, at 63,674, with Sumco, Screen Holdings and Taiyo Yuden among the heaviest fallers, according to Trading Economics.
AI stocks drag the region lower
The selling spread across Asia. Taiwan's benchmark dropped more than 5%, while trading remained shut in South Korea. Hong Kong's Hang Seng slipped 2% to 24,514.29, China's Shanghai Composite fell 1.6% to 3,818.59, and Australia's S&P/ASX 200 lost 0.7% to 8,775.70.
The weakness in AI-related shares reflects growing investor concern that the sector's sharp rally may have outpaced fundamentals. Markets are also weighing whether demand for advanced computer memory and processors will hold up if artificial intelligence fails to deliver the profits and productivity gains many investors have expected. Indian equities bucked the trend, with benchmark indices adding almost 1%.
Wall Street set the tone
The cautious mood followed a mixed session on Wall Street. Although nearly three-quarters of S&P 500 companies advanced after reporting earnings that beat analysts' expectations, losses in major technology stocks pulled the broader market lower. The Nasdaq Composite declined 1.5%, while the Dow Jones Industrial Average slipped 0.2%.
Nvidia fell 2.4%, the biggest drag on the S&P 500. Other AI-linked names retreated too: Micron Technology dropped 5.6%, SanDisk slid 12.6%, and Western Digital lost 9.2%.
Oil rises on Middle East risk
Meanwhile, oil prices extended gains as investors tracked the worsening conflict in the Middle East. Concerns that the war with Iran could disrupt tanker movement through the Strait of Hormuz and interrupt Persian Gulf crude exports continued to support prices. Brent crude rose 1.1% to $85.13 a barrel, while US benchmark crude gained 1.3% to $79.95 a barrel.
Sources: The Times of India, TradingView (snippet-based)
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