Asian stock markets experienced a substantial downturn on Friday, with Japan’s Nikkei 225 index leading the decline amid a sharp sell-off in technology and artificial intelligence-related stocks, which unsettled investors. The Nikkei plummeted 5.8%, closing below the critical 63,000 threshold. Simultaneously, Taiwan’s market also suffered a substantial drop of over 5%. Hong Kong’s Hang Seng index decreased by 2%, and the Shanghai Composite in China saw a 1.6% slip. Meanwhile, Australia’s S&P/ASX 200 managed a relatively smaller decline of 0.7%.
Recently, technology stocks have been under increasing pressure as concerns grow that valuations in the artificial intelligence sector may have escalated too rapidly. Investors are expressing doubts about whether the demand for advanced chips and memory products can sustain its strength if AI doesn’t achieve the anticipated profits and improvements in productivity. This apprehension has led to skepticism about the sector’s future growth, influencing market behavior.
In the U.S., the Nasdaq Composite also faced losses, dropping 1.5% on Thursday. The decline was exacerbated by notable setbacks among major chipmakers, with Nvidia experiencing a 2.4% decrease. Similarly, companies such as Micron Technology, SanDisk, and Western Digital recorded significant downturns, reflecting the broader market unease surrounding the tech industry.
Parallel to these developments, oil prices saw an upward trend as tensions escalated in the Middle East, sparking concerns about potential disruptions to global energy supplies passing through the Strait of Hormuz. Brent crude rose by 1.1%, reaching $85.13 per barrel, while U.S. benchmark crude increased by 1.3% to hit $79.95 per barrel. This rise in oil prices underscores the market’s sensitivity to geopolitical events, particularly in such a critical region for energy transit.