Asian stock markets experienced a significant downturn on Friday, with Japan’s Nikkei 225 index taking a notable hit as investors were shaken by a massive sell-off in technology and artificial intelligence-related stocks. The Nikkei plummeted by 5.8%, falling below the 63,000 threshold. Other markets in the region followed suit, with Taiwan’s market dropping over 5%, Hong Kong’s Hang Seng index decreasing by 2%, and China’s Shanghai Composite seeing a 1.6% decline. Australia’s S&P/ASX 200 also saw a more modest decrease of 0.7%.
The pressure on technology stocks has been escalating in recent weeks. Concerns are growing that valuations within the artificial intelligence sector have escalated too rapidly. Investors are increasingly skeptical about whether the demand for advanced chips and memory products will hold steady if AI does not deliver on anticipated profits and productivity improvements.
Simultaneously, the United States saw a similar trend, with the Nasdaq Composite dropping by 1.5% on Thursday due to losses in major chip manufacturing companies. Nvidia saw a 2.4% drop, while other significant players like Micron Technology, SanDisk, and Western Digital also recorded considerable declines.
Amid these stock market fluctuations, oil prices saw an upward movement as rising tensions in the Middle East led to fears of potential disruptions to global energy supplies via the Strait of Hormuz. Brent crude increased by 1.1% to hit $85.13 per barrel, and the US benchmark crude rose by 1.3%, reaching $79.95 per barrel.