Asian stock markets experienced a significant downturn on Friday, with Japan’s Nikkei 225 index leading the decline due to substantial sell-offs in technology and artificial intelligence-related stocks. The Nikkei suffered a 5.8% decrease, closing below the 63,000 threshold. Taiwan’s market also faced a similar fate, dropping over 5%, while Hong Kong’s Hang Seng index dipped by 2%, and China’s Shanghai Composite saw a 1.6% slide. Meanwhile, Australia’s S&P/ASX 200 recorded a modest decline of 0.7%.
This downward trend in technology stocks has been intensifying recently, driven by growing apprehensions over the rapid rise in valuations within the artificial intelligence sector. Investors are increasingly skeptical about whether the demand for advanced chips and memory products will sustain if AI technologies do not yield the anticipated profits and productivity advancements. These concerns have put considerable pressure on the sector.
In the United States, the technology sector also faced setbacks, with the Nasdaq Composite falling by 1.5% on Thursday. This decline was primarily influenced by losses among major chipmakers. Notably, Nvidia experienced a 2.4% drop, while Micron Technology, SanDisk, and Western Digital also reported notable decreases in stock value.
On another front, oil prices witnessed an upward trend amid escalating tensions in the Middle East. These geopolitical concerns have heightened fears regarding potential disruptions to global energy supplies, particularly through the strategic Strait of Hormuz. The price of Brent crude rose by 1.1%, reaching $85.13 per barrel, while the US benchmark crude climbed by 1.3% to $79.95 per barrel.