Sharp sell-off in tech stocks drags Asian stocks lower as markets in South Korea, Japan sink

Asian markets experienced a sharp decline on Thursday, with Japanese and South Korean stocks taking the biggest hits. The sell-off in technology shares intensified following a release of hotter-than-expected inflation data from the United States. South Korea's Kospi index plummeted 7.7% to 5,548.78, falling well below its all-time high of 9,000 reached in June due to excitement over the global artificial intelligence frenzy.

Samsung Electronics and SK Hynix, both major players in the sector, saw declines of 9.5% and 11.4% respectively. In Japan, the Nikkei 225 tumbled 4.8% to 64,489.06, while OpenAI investor SoftBank Group lost 9.4%. Chip equipment manufacturer Tokyo Electron and memory chipmaker Kioxia Holdings also experienced significant drops of 7.3% and 11.2% respectively.

Taiwan's Taiex, which benefited from the AI boom, fell 3%, with its key chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), dropping 2.2% ahead of its earnings report. Hong Kong's Hang Seng index slipped 1% to 24,071.25, and the Shanghai Composite index decreased 1.4% to 3,713.22. Australia's S&P/ASX 200 edged down 0.1% to 8,715.60.

The negative sentiment followed a drop in US markets on Wednesday, with the S&P 500 falling 1.1%, the Dow Jones Industrial Average dipping 0.1%, and the technology-heavy Nasdaq composite slipping 1.9%. The declines were driven by Nvidia's 3.2% loss, Broadcom's 3.1% decline, and AMD's 5.7% decrease. In the United States, the consumer price index rose 3.7% year-on-year in September, surpassing the 3.4% increase in August and exceeding economist expectations.