Asian stock markets experienced a significant downturn on Friday, with Japan’s Nikkei 225 index suffering a notable plunge due to heavy selling of technology and artificial intelligence-related shares. The index tumbled 5.8%, closing below the 63,000 threshold. Similarly, Taiwan’s stock market faced a steep decline, losing over 5%, while Hong Kong’s Hang Seng index decreased by 2%, and China’s Shanghai Composite saw a reduction of 1.6%. In Australia, the S&P/ASX 200 registered a smaller dip of 0.7%.
The downturn in the technology sector has been driven by growing apprehension among investors about the rapid rise in valuations within the artificial intelligence industry. Concerns are mounting over whether the anticipated demand for advanced chips and memory products can be sustained if AI technologies do not yield the expected levels of profitability and productivity enhancements. This uncertainty has placed significant pressure on tech stocks, contributing to the recent market volatility.
In the United States, similar trends were observed as the Nasdaq Composite fell by 1.5% on Thursday. This decline was largely attributed to the losses suffered by major chipmakers. Notably, Nvidia’s stock dropped by 2.4%, while other significant players in the sector such as Micron Technology, SanDisk, and Western Digital also experienced substantial downturns.
Amid the stock market fluctuations, oil prices rose in response to escalating tensions in the Middle East, which sparked fears of potential disruptions to global energy supplies passing through the Strait of Hormuz. Brent crude saw an increase of 1.1%, reaching $85.13 per barrel, while the U.S. benchmark crude climbed 1.3%, settling at $79.95 per barrel.