A sharp selloff in Asian technology stocks sent a chill through global equity markets on Thursday, as crowded bets on data centres and other artificial-intelligence plays faced what analysts called a reckoning from high and rising interest rates.
South Korea's KOSPI index plunged almost 8 per cent in its seventh consecutive session of declines, while Japan's Nikkei 225 fell 5 per cent for its sixth straight drop. Taiwan's TSMC slipped 2 per cent, Samsung Electronics plunged 9.9 per cent, memory chipmakers SK Hynix and Kioxia Holdings tumbled more than 11 per cent each, and AI investor SoftBank Group lost over 9 per cent. The MSCI index of Asia-Pacific shares outside Japan fell 3.4 per cent, marking a fourth straight day of losses.
Hot inflation rekindles rate fears
The immediate trigger was US consumer price inflation data for September, which accelerated by more than expected and rekindled fears of higher interest rates. On Wall Street, the S&P 500 fell 1.1 per cent — just a week after hitting a record high — the Nasdaq Composite tumbled 1.9 per cent, and a gauge of semiconductor stocks extended losses into a sixth day, with Oracle, CoreWeave and other AI names sensitive to borrowing costs among the hardest hit. "While the initial selloff was triggered by the hotter-than-expected CPI, tech was the main driver of today's selloff," JPMorgan analysts wrote, adding that "financing risks and IPO timelines" remained at the centre of the story. Charu Chanana of Saxo Bank said the rout looked "less like a sudden deterioration in technology fundamentals and more like a repricing of the cost of capital", noting that investors were questioning what price to pay for AI growth "when interest rates are high, volatile and potentially moving higher again."
A safety bid — and a bright spot
The anxiety drove investors toward safe havens: gold rose 1 per cent in London, while German, French and British government bond yields eased. The cost of insuring AI-linked giants against default also climbed, in some cases to records, with credit default swaps widening for Oracle, SoftBank and CoreWeave. Not all voices were gloomy — Mark Matthews of Bank Julius Baer said he was "not worried", citing reasonable valuations, no sign of recession and AI demand that "massively exceeds supply". And defying the gloom, TSMC posted a 69 per cent jump in third-quarter net profit to a record T$763.1 billion ($23.59 billion), beating market forecasts. Attention now turns to US producer-price and retail-sales data due later on Thursday, while Brent crude slipped 2 per cent to $103.8 a barrel.
Sources:
Reuters via Euronext: Tech sell-off gathers pace as chipmakers hammered
South Korea's KOSPI index plunged almost 8 per cent in its seventh consecutive session of declines, while Japan's Nikkei 225 fell 5 per cent for its sixth straight drop. Taiwan's TSMC slipped 2 per cent, Samsung Electronics plunged 9.9 per cent, memory chipmakers SK Hynix and Kioxia Holdings tumbled more than 11 per cent each, and AI investor SoftBank Group lost over 9 per cent. The MSCI index of Asia-Pacific shares outside Japan fell 3.4 per cent, marking a fourth straight day of losses.
Hot inflation rekindles rate fears
The immediate trigger was US consumer price inflation data for September, which accelerated by more than expected and rekindled fears of higher interest rates. On Wall Street, the S&P 500 fell 1.1 per cent — just a week after hitting a record high — the Nasdaq Composite tumbled 1.9 per cent, and a gauge of semiconductor stocks extended losses into a sixth day, with Oracle, CoreWeave and other AI names sensitive to borrowing costs among the hardest hit. "While the initial selloff was triggered by the hotter-than-expected CPI, tech was the main driver of today's selloff," JPMorgan analysts wrote, adding that "financing risks and IPO timelines" remained at the centre of the story. Charu Chanana of Saxo Bank said the rout looked "less like a sudden deterioration in technology fundamentals and more like a repricing of the cost of capital", noting that investors were questioning what price to pay for AI growth "when interest rates are high, volatile and potentially moving higher again."
A safety bid — and a bright spot
The anxiety drove investors toward safe havens: gold rose 1 per cent in London, while German, French and British government bond yields eased. The cost of insuring AI-linked giants against default also climbed, in some cases to records, with credit default swaps widening for Oracle, SoftBank and CoreWeave. Not all voices were gloomy — Mark Matthews of Bank Julius Baer said he was "not worried", citing reasonable valuations, no sign of recession and AI demand that "massively exceeds supply". And defying the gloom, TSMC posted a 69 per cent jump in third-quarter net profit to a record T$763.1 billion ($23.59 billion), beating market forecasts. Attention now turns to US producer-price and retail-sales data due later on Thursday, while Brent crude slipped 2 per cent to $103.8 a barrel.
Sources:
Reuters via Euronext: Tech sell-off gathers pace as chipmakers hammered