Global Market Today: Asian stocks slide after US tech rout

Asian stocks continued to decline, mirroring the downward trend on Wall Street as investors shifted away from technology leaders after a rapid rally earlier in the year. The MSCI regional equities index saw a 0.3% drop, marking a second consecutive day of losses. Taiwan's stock exchange will be closed on Friday due to a typhoon. Market sentiment remained unfavorable, with contracts for the Nasdaq 100 Index falling 0.3% early on in Asian trading.

Earlier, the Nasdaq 100 suffered a 2.9% decline and the Philadelphia Semiconductor Index suffered a 6.7% drop, both the steepest decreases since late June. Companies like Tesla and Meta Platforms faced pressure following their earnings reports. Rather than abandoning the market altogether, investors moved towards defensive, dividend-paying stocks and utilities.

Tech companies continued to be the focus of attention as South Korean chipmaker SK Hynix Inc. canceled an initial public offering for its US subsidiary, Solidigm, after receiving opposition from shareholders. The decline in the AI sector had prompted investors to seek the safety of bonds, with Treasuries experiencing their largest rally in over two years. The 10-year yield fell by 17 basis points to 4.95%, and the yen strengthened against most major currencies.

Brent crude oil held steady near $113.10 per barrel, buoyed by worries about potential supply disruptions following attacks in Saudi Arabia. Technology megacaps, which fueled a four-year bull run in US equities, bore the brunt of the selling as earnings from these companies suggested their recent performance might not have been sustainable. Next week, technology megacaps will face more challenges with earnings reports from Microsoft, Amazon, and Alphabet, along with the Federal Reserve's policy decision.

Some analysts noted a shift in investor sentiment, with Eugene Leow, a senior rates strategist at DBS Bank Ltd., suggesting that investor confidence in AI-related assets may be wavering. Elevated US yields and the ongoing geopolitical tensions, including concerns over the potential escalation of the Iran war, have contributed to the risk-off approach among investors. The rally in Treasuries pushed the 10-year yield below 5% for the first time in a month.