Deepening tech sell-off drags stocks lower as major markets slide
Technology Rout Sends Asian Markets Lower After Inflation Surprise
Poinews.com – Asian stock markets opened sharply lower on Thursday as renewed pressure on major technology companies spread through the region, following a weak session on Wall Street. Investors were reacting to a stronger-than-expected US inflation reading that raised fresh concerns about the outlook for interest rates and high-growth shares.
South Korea and Japan were among the hardest-hit markets, while US equity futures also moved lower ahead of the next trading session. The declines reflected the growing sensitivity of artificial intelligence-linked companies and semiconductor groups to changes in inflation expectations.
South Korean technology shares suffer steep losses
South Korea’s Kospi fell 7.7% to 5,548.78. The benchmark was far below the 9,000 level reached in June, when enthusiasm surrounding the global AI expansion pushed the index to a record high.
Samsung Electronics dropped 9.5%, while memory-chip producer SK Hynix sank 11.4%. Both companies have been closely tied to investor interest in chips used for advanced computing and AI systems, leaving their shares particularly exposed as sentiment toward the technology sector weakened.
The scale of the move underlined how quickly a market rally driven by expectations for AI-related demand can reverse when investors reassess valuations and the broader economic environment.
Japan’s Nikkei slides as chip-linked companies retreat
Japan’s Nikkei 225 declined 4.8% to 64,489.06. SoftBank Group, an investor in OpenAI, lost 9.4% amid the wider retreat in companies connected to the AI investment cycle.
Chip-equipment manufacturer Tokyo Electron fell 7.3%, while memory-chip maker Kioxia Holdings dropped 11.2%. The moves added to concerns that the sell-off was extending beyond a small group of US technology names and into companies across the global semiconductor supply chain.
Technology shares can face especially sharp swings when borrowing costs or inflation expectations change. Investors often place a higher value on future earnings from fast-growing companies, and those valuations can come under pressure when inflation data suggests interest rates may remain elevated for longer.
Losses spread across regional markets
Taiwan’s Taiex fell 3%, continuing the regional decline. Taiwan Semiconductor Manufacturing Co., known as TSMC, lost 2.2% before its earnings report. As a major chipmaker, TSMC is a closely watched company for investors seeking signals about demand across the semiconductor industry.
In Hong Kong, the Hang Seng Index dropped 1% to 24,071.25. Mainland Chinese shares also weakened, with the Shanghai Composite falling 1.4% to 3,713.22.
Australia’s S&P/ASX 200 was relatively more resilient but still slipped 0.1% to 8,715.60. The varying declines showed that the market pressure was broad, even if the most severe selling remained concentrated in shares associated with AI, chips and technology investment.
Wall Street decline sets the tone
The downturn followed Wednesday’s losses in the United States. The S&P 500 fell 1.1%, the Dow Jones Industrial Average declined 0.1%, and the Nasdaq composite lost 1.9%.
Major AI-related companies were among the weakest performers. Nvidia fell 3.2%, Broadcom lost 3.1%, and Advanced Micro Devices, or AMD, dropped 5.7%.
These companies have played a central role in the market’s AI-driven rally, particularly because of demand for processors, networking equipment and memory used in data centres. Their declines weighed heavily on the technology-focused Nasdaq and influenced trading across markets that host suppliers and manufacturers linked to the same industry.
Inflation data revives concerns over rates
Wednesday’s US consumer price index data provided the immediate backdrop for the market move. Consumer prices rose 3.7% year-on-year in September, accelerating from 3.4% in August and exceeding economists’ expectations.
For investors, inflation figures matter because they can shape expectations about monetary policy. A higher reading may make it harder for central banks to ease borrowing costs quickly, while higher rates can put pressure on share prices, especially in sectors where investors expect much of the profit growth to arrive in future years.
The latest market moves do not change the importance of AI and semiconductor companies to global equity markets, but they highlight the risks of concentrated enthusiasm. When a relatively small group of large technology names drives a substantial part of a rally, shifts in confidence can have effects well beyond the companies directly involved.
Thursday’s trading placed attention on whether the pressure on technology shares would stabilise or broaden further. With TSMC due to report earnings and US futures already lower, investors were watching for fresh indications of both chip-sector demand and the broader response to the inflation outlook.
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