Asian stock markets experienced significant downturns on Friday, with Japan’s Nikkei 225 index suffering a pronounced decline. The index plummeted 5.8%, closing under the 63,000 threshold, as a wave of selling in technology and artificial intelligence-related stocks unsettled investors. Similarly, Taiwan’s market saw a drop exceeding 5%, while Hong Kong’s Hang Seng index fell by 2%. In China, the Shanghai Composite index decreased by 1.6%, and Australia’s S&P/ASX 200 recorded a 0.7% slide.
Recent weeks have seen increasing pressure on technology stocks, driven by apprehensions over rapidly escalating valuations within the artificial intelligence sector. Investors are growing wary, questioning whether the demand for advanced chips and memory products can sustain its momentum if artificial intelligence fails to deliver anticipated profits and improvements in productivity.
In the United States, the ripple effects were felt as the Nasdaq Composite saw a 1.5% decline on Thursday, primarily due to losses among major semiconductor manufacturers. Nvidia’s shares fell by 2.4%, while other significant players like Micron Technology, SanDisk, and Western Digital also experienced notable downturns.
Concurrently, oil prices witnessed an upward trend amid escalating tensions in the Middle East, which have sparked concerns over potential disruptions in global energy supplies through the critical Strait of Hormuz. In response to these geopolitical tensions, Brent crude oil increased by 1.1%, reaching $85.13 per barrel, while the US benchmark crude saw a 1.3% rise, climbing to $79.95 per barrel.