Asian stock markets experienced a significant downturn on Friday, marked by a pronounced drop in Japan’s Nikkei 225 index. Investor concerns over technology and artificial intelligence-related stocks prompted a wave of heavy selling, causing the Nikkei to plummet 5.8%, closing below the 63,000 threshold. Taiwan’s market also suffered, declining more than 5%, while Hong Kong’s Hang Seng index fell by 2%. In China, the Shanghai Composite saw a 1.6% decrease, and Australia’s S&P/ASX 200 dipped 0.7%.
The technology sector has been under increasing scrutiny recently, as fears grow that valuations in the artificial intelligence industry have escalated too rapidly. The market is becoming wary of whether the demand for advanced chips and memory products can sustain its momentum if AI fails to meet anticipated profits and productivity enhancements.
In the United States, similar apprehensions impacted the Nasdaq Composite, which dropped 1.5% on Thursday. The decline was driven by losses among major chipmakers, with Nvidia seeing a 2.4% decrease. Other semiconductor companies like Micron Technology, SanDisk, and Western Digital also faced notable downturns.
Amid these stock market fluctuations, oil prices rose as escalating tensions in the Middle East sparked worries about potential disruptions to global energy supplies through the critical Strait of Hormuz. Brent crude increased by 1.1% to $85.13 per barrel, while the US benchmark crude climbed 1.3%, reaching $79.95 per barrel.