Asian stock markets took a significant hit on Friday, with Japan’s Nikkei 225 index leading the downturn due to heavy selling of technology and artificial intelligence-related shares. The Nikkei plummeted by 5.8%, closing below the 63,000 mark, as investor sentiment was shaken. Similarly, Taiwan’s market experienced a decline of over 5%, while Hong Kong’s Hang Seng index fell by 2%, and China’s Shanghai Composite dropped by 1.6%. Australia’s S&P/ASX 200 saw a more modest decrease of 0.7%.
The pressure on technology stocks has been mounting over recent weeks, driven by growing concerns that valuations in the artificial intelligence sector have escalated too rapidly. Investors are expressing doubts about whether the demand for advanced chips and memory products will remain robust if artificial intelligence does not deliver the anticipated profits and productivity improvements.
The impact of these concerns was also felt in the United States, where the Nasdaq Composite dropped by 1.5% on Thursday. The decline was primarily due to losses in major chipmakers, with Nvidia experiencing a 2.4% fall. Other technology firms, including Micron Technology, SanDisk, and Western Digital, also recorded significant decreases.
In contrast to the downturn in stock markets, oil prices rose amid escalating tensions in the Middle East, which heightened worries about potential disruptions to global energy supplies through the Strait of Hormuz. Brent crude increased by 1.1%, reaching $85.13 per barrel, while the US benchmark crude rose by 1.3%, hitting $79.95 per barrel.
