Stocks in Japan and South Korea fell sharply as Asian markets were affected by a significant drop in technology stocks on Wall Street yesterday.
Significant Decline in Asian Markets
The Nikkei 225 index in Tokyo dropped by 5.5% in early trading on Friday, while the KOSPI index in South Korea, which is influenced by technology, fell by 8.8%, leading to a 20-minute trading halt. The TAIEX index in Taiwan also decreased by more than 8%.
Impact on Asian Tech Giants
Major Asian technology companies, including Samsung Electronics, SK Hynix, and Taiwanese company TSMC, were heavily impacted by this widespread sell-off related to artificial intelligence technology. Samsung's stock fell nearly 10%, while SK Hynix's stock dropped over 11%.
Chip-related stocks in Japan also faced significant declines, with Tokyo Electron's stock falling about 9% and Kioxia's stock dropping 13%.
Futures for European stocks also fell by 1%, indicating that this downward trend is likely to spread to Europe as well.
On Thursday, U.S. markets were pressured due to a sharp decline in technology stocks, particularly companies involved in building artificial intelligence infrastructure such as data centers. The Nasdaq index dropped by 5.52%, losing $2.5 trillion (about €2.23 trillion) in market value, while the S&P 500 fell by 4.4%.
This significant sell-off was driven by increasing investor concerns about massive spending plans in the field of artificial intelligence and whether these expenditures would ultimately lead to substantial profits.
The results of the U.S. midterm elections, in which the Democrats gained control of both houses of Congress, fueled these concerns. Several elected Democratic governors campaigned on slowing down artificial intelligence development and made promises to halt or suspend the construction of data centers amid growing public opposition to these projects.
Michael McCarthy, CEO of the online brokerage firm Moomoo in Australia and New Zealand, noted a shift in market sentiment, stating, "There is clearly a real change in sentiment. Market milestones are often accompanied by strong disagreements, and this is reflected in the market with extreme volatility in both directions."
He added, "It seems that this is what we are witnessing right now, and last night's decisive sell-off indicates that we are moving in this direction now."
