Asian markets fall on tech stock rout as high US inflation weighs on Wall Street
Asian markets fell on Thursday, as artificial intelligence-related stocks plunged after a drop on Wall Street, fuelled by concerns about rising competition and profit growth in the chips sector. South Korea's Kospi slumped more than 7 per cent, while Tokyo’s Nikkei 225 index was down 5.12 per cent at midday local time on Thursday. Hong Kong's Hang Seng index dropped by 1 per cent, while China's…
Asian markets experienced a decline on Thursday as technology stocks, particularly those related to artificial intelligence, suffered significant losses. The drop on Wall Street was attributed to concerns about heightened competition and reduced profit growth within the chip sector. South Korea's Kospi index dropped over 7%, Tokyo's Nikkei 225 index fell 5.12%, Hong Kong's Hang Seng index decreased by 1%, and China's Shanghai Composite Index experienced a decline of 1.75%.
The International Monetary Fund expressed concern over Asia's heavy reliance on the AI boom, citing that strong global demand for semiconductors, AI infrastructure, and related technology products has led to increased exports and investments, especially in nations integrated into technology supply chains. However, the IMF warned that a correction in AI-related investment or asset valuations could have a disproportionate impact on Asia, given its central role in global technology supply chains.
Wall Street stocks continued to fall on Thursday as US consumer price inflation exceeded expectations in September, reaching 3.7% annually. This inflation rate surpassed both the 3.6% forecast for the month and August's 3.4%. Core inflation also remained higher than anticipated at 2.6% year-on-year. The S&P 500 witnessed its weakest session since late July, while the Nasdaq Index faced increased pressure from chip stocks.
These developments raised the likelihood of a rate hike by the US Federal Reserve, according to Daniel Richards, a senior economist at Emirates NBD.
Written by urgent.news from The National Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
