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 plummeted 5.8%, falling below the 63,000 threshold. Taiwan’s market also saw a decrease of over 5%, while Hong Kong’s Hang Seng index and China’s Shanghai Composite fell by 2% and 1.6%, respectively. Australia’s S&P/ASX 200 recorded a smaller loss of 0.7%.
The pressure on technology stocks has been mounting over recent weeks, primarily due to concerns about the rapid rise in valuations within the artificial intelligence sector. This has led investors to question whether the demand for advanced chips and memory products will remain robust if AI technologies do not deliver the anticipated profits and productivity enhancements.
In the United States, the Nasdaq Composite experienced a 1.5% decline on Thursday, driven by losses among major chipmakers. Nvidia’s stock fell by 2.4%, with Micron Technology, SanDisk, and Western Digital also reporting notable declines.
Amidst these stock market fluctuations, oil prices have increased as tensions in the Middle East have escalated, heightening concerns about potential disruptions to global energy supplies, particularly through the Strait of Hormuz. Brent crude rose by 1.1% to $85.13 per barrel, while U.S. benchmark crude saw a 1.3% increase, reaching $79.95 per barrel.