Asia Tech Stocks Plunge Following Wall Street AI Selloff Amid Fading Rate-Cut Hopes

Asia-Pacific markets suffered significant losses on Friday as Wall Street’s earlier AI-related rally reversed sharply, rattling investor confidence. Hopes for a December rate cut by the U.S. Federal Reserve faded after stronger-than-expected U.S. jobs data, sending tech-heavy indexes across the region into negative territory.

In Japan, the Nikkei 225 tumbled 2.4% to close at 48,625.88, while the Topix index ended largely flat. The tech sector bore the brunt of the declines, led by SoftBank, which plunged over 10%. Other major players such as Advantest, Tokyo Electron, Lasertec, and Renesas Electronics fell between 2.65% and 12.1%, highlighting widespread weakness across the market. Rising core inflation in Japan, which hit its highest pace since July, intensified concerns about potential interest rate hikes by the Bank of Japan.

South Korea’s Kospi index retreated 3.79%, closing at 3,853.26, while the Kosdaq slipped 3.14% to 863.95. Samsung Electronics and SK Hynix fell sharply by 5.77% and 8.76%, respectively. Meanwhile, Australia’s S&P/ASX 200 dropped 1.59%, and Hong Kong’s Hang Seng Index closed 2.38% lower, with the tech-focused Hang Seng Tech index sliding 3.21%. Electric vehicle stocks also struggled, as BYD, Nio, and Li Auto all posted losses.

In the broader Asian market, mainland China’s CSI 300 index fell 2.44% to 4,453.6, while India’s Nifty 50 and BSE Sensex posted modest declines of 0.34% and 0.29%, respectively. Digital assets mirrored this downward trend, with Bitcoin hitting a seven-month low at $83,829.94 and Ether dropping to levels not seen since July before slightly recovering.

The selloff mirrors volatility in U.S. markets, where AI-focused stocks such as Oracle, AMD, and Nvidia reversed gains and closed in the red. Strong U.S. jobs data dampened investor expectations for an imminent rate cut, reducing the likelihood of cheaper borrowing costs. The Nasdaq Composite fell 2.16%, the S&P 500 lost 1.56%, and the Dow Jones Industrial Average slipped 0.84%, underscoring the market’s fragile sentiment ahead of upcoming economic data.

source: cnbc