Asian stock markets fell sharply on Friday, led by a broad sell-off in technology shares as investors reassessed valuations and took profits after recent rallies, according to BBC Business.
Market Performance
South Korea's Kospi index fell 5.8% after an 8% intraday decline triggered a 20-minute trading halt via a circuit breaker mechanism designed to curb panic selling, BBC Business reported. This marked the third such halt this week and the fifth this year, highlighting persistent volatility in South Korean equities.
In Japan, the Nikkei 225 closed more than 4% lower, with technology investment giant SoftBank plunging 12.5%. Other major indexes in Taiwan and mainland China also posted sharp declines, though specific figures were not provided in the source.
| Index | Change | Country |
|---|---|---|
| Kospi | -5.8% | South Korea |
| Nikkei 225 | -4%+ | Japan |
| Taiwan & China indices | Sharply lower | Taiwan, China |
Key Movers: Apple and Microsoft
The Asian sell-off followed steep drops in US tech shares on Thursday. Apple shares fell 6% — its biggest one-day decline in more than a year — after the company announced it would raise prices for iPads and MacBooks due to soaring costs for computer chips, BBC Business reported.
Microsoft shares also declined after it announced higher prices for its Xbox gaming consoles, citing higher component costs. The moves have raised concerns that rising component prices could hit device sales, potentially slowing demand for computer chips, according to the report.
Valuation Concerns and AI Spending
Investors are also worried about the hundreds of billions of dollars being spent this year by big tech firms to build artificial intelligence (AI) infrastructure, BBC Business noted. Traders are reassessing tech stock valuations, with some taking profits after a rally in recent months.
David Makaryan, senior partner at investment firm Alpha Pacific Group, said: "The long term investment case for AI remains compelling, but investors are becoming far more selective about which companies can justify the valuations the market has assigned to them."
Raymond Woo, an analyst at Kyoto University Innovation Capital, observed that the high cost of commercialising AI tools is gradually being passed on to consumers. That "naturally raises questions" about how quickly demand for such tools will match the investment into AI, and whether today's tech stock valuations are realistic, Woo said.
Circuit Breaker Volatility
Share trading in South Korea has been particularly volatile in recent months. Friday's 20-minute halt on the Kospi was the third time this week the circuit breaker was triggered, and the fifth such event this year, according to BBC Business.
Implications for Investors and Executives
For C-suite executives and investors, the simultaneous pullback across major Asian markets and US tech leaders signals a potential inflection point in market sentiment. The combination of rising component costs, price hikes being passed to consumers, and massive AI infrastructure spending is prompting a more selective approach to tech exposure. Companies heavily reliant on semiconductor supply chains or AI investment narratives may face heightened scrutiny on valuation justifications in coming quarters.
