A selloff in technology stocks is dragging global equities lower, led by a retreat in chipmakers that have been at the forefront of an unprecedented artificial intelligence (AI)-driven rally.
South Korea’s KOSPI plunged 10 percent from a record high the previous session, with memory giants SK Hynix Inc and Samsung Electronics Co slumping more than 12 percent.
Tokyo also took a hit, shedding 3.6 percent, with tech investment titan Softbank Group Corp down more than 10 percent, Tokyo Electron Ltd 6.2 percent lower and Advantest Corp off more than 2 percent.
Photo: AP
In Taipei, the TAIEX closed down 1.34 percent, as contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電) fell 0.8 percent, while Nanya Technology Corp (南亞科技) plunged 10 percent and Macronix International Co (旺宏電子) lost 7.28 percent.
“Tech stocks at home and abroad had been given significant boosts by the AI investment frenzy and investors decided to reconsider their valuations,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
Elsewhere in Asia, Hong Kong sank 1.8 percent and Shanghai shed 1.4 percent, while Sydney, Wellington, Mumbai, Bangkok and Jakarta were also down sharply.
Yesterday’s moves follow the previous session’s selloff in US tech heavyweights as doubts emerged over whether hyperscalers such as Alphabet Inc can justify their colossal AI spending.
Separately, SpaceX shares fell to their lowest level since their first day of trading as Elon Musk’s rocket firm embarked on a sale of investment-grade bonds.
Attention is shifting to Micron Technology Inc’s quarterly results today. The stock has been this year’s standout performer in the Philadelphia Semiconductor Index, rallying more than 300 percent since January.
Attention is also on Tokyo as the yen sits just below a 40-year low against the US dollar following the US Federal Reserve’s hawkish turn last week and concerns Japan’s central bank might not be doing enough to fight inflation.
Traders are keeping tabs on developments after NHK and Kyodo News said Japanese Minister of Finance Satsuki Katayama and US Secretary of the Treasury Scott Bessent had spoken about exchange rates on Monday.
Japan and the US “are in a firm agreement that we would take resolute measures whenever necessary,” Katayama said after talking to Bessent, a conversation confirmed by the Japanese government.
The comments suggest Japan is prepared to intervene again in financial markets to support the yen, having spent more than US$70 billion doing so last month.
The reports helped the yen recover from a low of ￥161.93 per US dollar, just short of the ￥161.96 last seen in December 1996. It was sitting at about ￥161.60 during yesterday afternoon trading in Tokyo.
Meanwhile, Brent crude is heading for its first close below US$77 a barrel since the first week of the war in the Middle East. Traders are taking comfort from signs that two months of talks toward a permanent deal between the US and Iran got off to a hopeful start, with Washington issuing a 60-day license allowing Tehran to sell oil on the international market.
Additional reporting by AFP and CNA