Global Market Today: Asian stocks slide as tech earnings disappoint, AI fears mount
The Kospi Index in South Korea — a key barometer of the AI trade — fell over 3% with chip heavyweights Samsung Electronics Co. and SK Hynix Inc. declining. That dragged the MSCI Asia Pacific Index down 0.3%.
Global markets saw a decline on Thursday, with Asian stocks sliding as technology earnings fell short and concerns about artificial intelligence investments grew. The Kospi Index in South Korea, a key indicator of the AI sector, dropped over 3%, and chip companies Samsung Electronics and SK Hynix also fell. The MSCI Asia Pacific Index fell 0.3%.
US tech-heavy Nasdaq 100 futures slipped 1.5%, while the S&P 500 dropped 0.6%. Wall Street indexes had previously declined on Thursday, with Alphabet Inc. experiencing a record drop after earnings did not meet expectations. Amazon.com Inc. also fell 7.3% in extended trading due to increased spending and slower online business growth.
Intel Corp. plunged 23% in after-hours trading after missing revenue estimates, citing weak demand for PC processors and supply-chain issues. Market strategist Greg Boland noted that investors are now seeking concrete evidence that investment in AI will yield profits, contributing to risk-averse sentiment in tech stocks and extending into Asian markets.
The selloff in tech prompted a rush to safer assets, such as US Treasuries, as traders reduced expectations for Federal Reserve rate hikes. The Australian dollar weakened as sovereign debt tracked US Treasury movements. The dollar index fell 0.1% in early Friday trading, while the yen was slightly weaker at around 157.90 per dollar ahead of the Bank of Japan’s interest rate decision.
The central bank was expected to keep rates steady while indicating that underlying inflation had hit its 2% target. Despite the tech sector's poor performance, more than 400 S&P 500 companies advanced on Thursday as investors moved into other sectors. However, chip stocks suffered the most significant losses, with the Philadelphia Semiconductor Index down 1.4%, the Nasdaq 100 dropping 1.4%, and the S&P 500 falling 0.3%.
Microsoft Corp. benefited from a strong demand for its $25 billion debt offering. A suspected hack involving billions of dollars on the Binance crypto exchange led to asset freezes, and cryptocurrencies plummeted. US debt rallied across the curve, driven by a hedge against potential economic slowdown. Shorter-dated debt led the advance, with two-year yields falling as much as 10 basis points as traders anticipated fewer Fed rate increases.
Despite strong economic data showing resilient growth and persistent price pressures, US oil rose early Friday due to potential military strikes against Iran, which could disrupt energy flows.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
