Key facts
- Asian markets tumbled sharply on Friday.
- South Korea's Kospi and Japan's Nikkei 225 indices saw significant declines.
- Apple announced price increases for products like iPhones and iPads.
- Apple cited soaring memory chip costs driven by AI demand for price hikes.
- This suggests inflation will remain sticky despite falling energy prices.
- SoftBank shares plunged over 12% on Friday morning.
- Reports indicate OpenAI is considering delaying its initial public offering.
- Japanese chipmaker Kioxia shares fell 12% on Friday.
- A circuit breaker was activated on the South Korean stock exchange.
- The Kospi index lost 5.81% before trading was halted.
- Trading was halted for 20 minutes after the Kospi fell over 8%.
Asian markets experienced a significant downturn on Friday, with major indices like South Korea's Kospi and Japan's Nikkei 225 seeing sharp declines. The selloff was largely influenced by Apple's announcement of upcoming price increases for its products, including iPhones and iPads. Apple CEO Tim Cook attributed these hikes to soaring memory chip costs, which are being driven by high demand from artificial intelligence applications. This situation suggests that inflation may remain persistent, even as energy prices continue to fall.
Further exacerbating market jitters, SoftBank Group shares dropped more than 12% following reports that OpenAI is considering postponing its initial public offering. This news impacted investor sentiment towards AI-driven companies, leading to a broader selloff in the sector. Japanese chipmaker Kioxia also experienced a substantial decline, with its shares falling 12% on Friday. The tech rally that was previously fueled by Micron's strong earnings reversed as a result of these developments.
The activation of a circuit breaker on the South Korean stock exchange underscored the severity of the market's fall. The benchmark Korea Composite Stock Price Index (KOSPI) lost 5.81% of its value, prompting the bourse operator to halt trading for 20 minutes after the index fell over 8%. Investors engaged in profit-taking amid concerns over the potential delay of OpenAI's market debut and the broader implications of rising chip costs on tech company profitability.