Asian stock markets experienced significant declines on Friday, primarily driven by a sharp fall in Japan’s Nikkei 225 index. The index plummeted 5.8%, closing below the 63,000 mark, as a wave of selling hit technology and artificial intelligence-related stocks, unsettling investors. Taiwan’s market also took a hit, dropping over 5%, while Hong Kong’s Hang Seng index decreased by 2%. In China, the Shanghai Composite fell by 1.6%, and Australia’s S&P/ASX 200 slipped by 0.7%.
This downturn in technology stocks comes amid growing concerns that the valuations in the artificial intelligence sector may have surged too rapidly. Investors are wary that the demand for advanced chips and memory products might not sustain if artificial intelligence does not deliver the anticipated profits and productivity enhancements. The pressure on these stocks has been mounting over recent weeks.
In the United States, the technology sector also faced challenges, with the Nasdaq Composite falling 1.5% on Thursday. Major chipmakers suffered losses, with Nvidia seeing a 2.4% drop. Other significant declines were noted for companies such as Micron Technology, SanDisk, and Western Digital.
Amidst these financial market movements, oil prices saw an increase, fueled by escalating tensions in the Middle East. This situation has sparked concerns about potential disruptions to global energy supplies, particularly through the crucial Strait of Hormuz. As a result, Brent crude prices rose by 1.1% to reach $85.13 per barrel, while US benchmark crude climbed 1.3% to $79.95 per barrel.