Asian stocks fell on Thursday as technology shares led a broad selloff. Worries over AI investment costs and escalating Gulf tensions weighed on sentiment, while China's CSI 300 neared, and by the FT's count entered, a bear market.
Asian stocks retreated on Thursday as technology shares led the selloff, and MSCI's broadest index of Asia-Pacific shares outside Japan slumped 1.8% to its lowest level in nearly three months. The index was on track for a fourth straight week of decline.
Reuters reported that Wall Street earnings failed to quell worries over soaring AI investment costs. Escalating Gulf tensions also boosted oil and weighed on risk sentiment.
Chip and Chinese tech names lead the losses
Korean shares tumbled more than 4%, and Hong Kong's Hang Seng Index lost more than 3%. Japan's Nikkei gave up earlier gains to trade 2% lower.
Tokyo Electron fell more than 6%, while SK Hynix and Samsung dropped 5.7% and 4.2%. Alibaba tumbled 6.5% in Hong Kong. In Tokyo, the FT said, SoftBank shed more than 6% and has fallen more than 30% over the past month.
China's CSI 300 fell 2%, pushing it to the brink of a technical bear market, according to Reuters. The FT put it differently: the index entered bear market territory, dropping to just over 4,000 points and down 20% since June.
Alibaba also faced pressure from Beijing. The FT said the State Administration for Market Regulation summoned ecommerce platforms and urged stricter product-quality standards.
Oil climbs as investors seek safety
Brent crude rose more than 2% to $111.03 a barrel, near a five-month high, after more Houthi attacks in Saudi Arabia raised the risk of wider conflict and supply disruptions in the Middle East. A flight to safety pushed the 10-year Treasury yield down nearly 6 basis points to 5.0857%.
Investors also face an upcoming Fed decision, geopolitical risks and US mid-terms. Kyle Rodda, senior financial market analyst at Capital.com, told Reuters: "There’s a lot of noise out there at the moment" as investors digest results.
Wall Street futures point lower
Overnight, the Nasdaq led Wall Street to a slightly higher close, and Meta reported third-quarter revenue that beat expectations, easing fears over the payoff from AI spending. The optimism quickly evaporated in Asia, however, as Meta's plan to issue non-voting Class C stock revived concerns over mounting capital commitments.
Futures now point lower. S&P 500 e-minis dropped 0.8%, and the FT reported Nasdaq futures were down 1.3%.
Sources: Investing.com (Reuters), Financial Times
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