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-focused stocks. The Nikkei saw a dramatic drop of 5.8%, which brought it below the 63,000 level. Similar trends were observed across the region, with Taiwan’s market plummeting by more than 5%, Hong Kong’s Hang Seng index falling by 2%, and China’s Shanghai Composite decreasing by 1.6%. Australia’s S&P/ASX 200 also edged down by 0.7%.
Recently, technology stocks have been under escalating pressure as investors grow wary of the rapid increase in valuations within the artificial intelligence sector. There is a growing concern among investors about whether the demand for advanced chips and memory products will continue to be robust if artificial intelligence does not achieve the anticipated profits and productivity improvements.
The impact of these concerns was also felt in the United States, where the Nasdaq Composite fell by 1.5% on Thursday. Major chipmakers contributed to the decline, with Nvidia dropping by 2.4%. Other significant losses were reported by Micron Technology, SanDisk, and Western Digital, reflecting the broader anxiety over the sector’s future performance.
In a separate development, oil prices rose amid escalating tensions in the Middle East, which have sparked fears of potential disruptions to global energy supplies, particularly through the critical Strait of Hormuz. Brent crude increased by 1.1% to reach $85.13 per barrel, while U.S. benchmark crude saw a gain of 1.3%, climbing to $79.95 per barrel.