Asian equities tumbled on Friday as concerns over artificial intelligence-led stocks deepened, with Japan and Taiwan recording the sharpest declines, according to Business Today. The sell-off, combined with growing Middle East tensions, kept investors cautious, lifting oil prices while US futures traded lower.
Market Declines Across Asia
Japan's Nikkei 225 led the regional losses, plunging 5.8% to 62,945.97 after computer chipmakers and other AI-linked companies witnessed broad-based selling. Taiwan's benchmark also dropped more than 5%, while trading remained shut in South Korea.
| Index | Change | Level |
|---|---|---|
| Japan Nikkei 225 | -5.8% | 62,945.97 |
| Taiwan (weighted) | > -5% | — |
| Hong Kong Hang Seng | -2.0% | 24,514.29 |
| China Shanghai Composite | -1.6% | 3,818.59 |
| Australia S&P/ASX 200 | -0.7% | 8,775.70 |
| India BSE Sensex (11:30 am IST) | ~ +1% | 77,903.91 |
| India NSE Nifty50 (11:30 am IST) | ~ +1% | > 24,250 |
Indian equities, meanwhile, traded in green with benchmark indices adding almost 1%. Around 11:30 am IST, BSE Sensex was at 77,903.91 while NSE Nifty50 crossed 24,250 levels.
AI-Linked Stocks Under Pressure
The weakness in AI-related shares reflects growing investor concerns that the sector's sharp rally may have outpaced fundamentals, the report noted. Markets are weighing whether demand for advanced computer memory and processors will remain strong if artificial intelligence fails to generate the profits and productivity gains many investors have been expecting.
Among individual stocks, Nvidia fell 2.4%, emerging as the biggest drag on the S&P 500. Other companies that have ridden the AI wave also retreated:
- Micron Technology dropped 5.6%, bringing its gains for the year below 199%.
- SanDisk slid 12.6%, though it remains up 494% this year.
- Western Digital lost 9.2% but is still higher by 171% for the year.
The cautious mood followed a mixed session on Wall Street. Although nearly three-quarters of companies in the S&P 500 advanced after reporting quarterly earnings that exceeded analysts' expectations, losses in major technology stocks pulled the broader market lower. The S&P 500 ended down 0.5%, the Dow Jones Industrial Average slipped 0.2%, and the Nasdaq Composite declined 1.5%.
Oil Prices Rise on Middle East Tensions
In commodity markets, oil prices extended their gains as investors monitored the worsening conflict in the Middle East. Concerns that the war with Iran could disrupt tanker movement through the Strait of Hormuz and interrupt crude exports from the Persian Gulf continued to support prices.
- Brent crude rose 1.1% to US USD 85.13 a barrel.
- US benchmark crude gained 1.3% to US USD 79.95 a barrel.
Implications for Corporate Treasurers
The broad-based selling in AI stocks and the surge in oil prices due to Middle East tensions create a dual challenge for Asian export-oriented economies. Japan's Nikkei decline of 5.8% reflects heavy exposure to AI supply chains, while rising energy costs may pressure margins for manufacturers. Corporate treasurers in the region should monitor these developments closely as they affect both asset valuations and operating costs.
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