Key facts
- South Korea's KOSPI 200 index fell 8.1% to a six-month low.
- SK Hynix and Samsung Electronics plunged nearly 11% and 9.5% respectively.
- Japan's Nikkei 225 dropped 4.9%, with Kioxia down 11% and SoftBank down 10%.
Tech stocks declined sharply on Thursday, with the MSCI Asia-Pacific index falling 3.4%. Concerns over high interest rates impacting AI infrastructure investments and corporate IT budgets are driving a sell-off, leading to questions about current market valuations.
Concerns over inflation and interest rates are impacting AI-related investments, leading to significant sell-offs in tech stocks globally. The potential for a broader AI market correction poses a risk to financial stability, affecting major economies and companies.
Global markets experienced an accelerating sell-off of AI-linked shares on Thursday, as fears over rising inflation and future interest rate hikes spooked traders. South Korea’s benchmark KOSPI 200 index, heavily weighted towards memory chip makers, fell 8.1% to a six-month closing low, triggering trading halts. Semiconductor stocks SK Hynix and Samsung Electronics plunged nearly 11% and 9.5% respectively.
Japan’s Nikkei 225 dropped 4.9%, with memory chip maker Kioxia down 11% and SoftBank, a major investor in OpenAI, down 10%. The falls followed a slide on Wall Street, where the Nasdaq Composite fell 1.9% and the S&P 500 dropped 1.1% on Wednesday. US inflation data showed a higher-than-expected 3.7% rise in September, fueling expectations of further interest rate increases by the Federal Reserve.
The International Monetary Fund had warned earlier in the week that the threat of an AI share price crash rippling across global markets puts world financial stability at risk. China’s CSI 300 index slipped as much as 2.4%, and Taiwan’s TSMC fell 2%. European stocks were also lower at the start of trading.
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