Asian stock markets were rattled on Friday as a sharp sell‑off in U.S. technology shares spilled over into the region. The downturn began overnight in the United States, where the Nasdaq fell 5.5 percent, wiping roughly $3 trillion from S&P 500 technology firms. Investors blamed the recent Democratic victory in the U.S. mid‑term elections, which many fear could lead to tighter regulation of artificial intelligence and slow the expansion of data‑centre infrastructure that has fueled the AI boom.
In Japan, the Nikkei 225 plunged 6 percent, its steepest one‑day drop since April 2025. South Korea’s KOSPI and Taiwan’s TAIEX fell more than 8 percent in the early session, before authorities intervened to curb the selling. South Korean regulators temporarily halted trading on the KOSPI as the index slumped, and Finance Minister Lee Hyoung‑il loosened rules on retail investors’ leveraged positions in an effort to stabilise the market.
China’s state‑owned entities stepped in to buy equities, according to Al Jazeera’s Katrina Yu, who reported from Beijing. The move was aimed at calming the market after the initial shock. Meanwhile, Taiwan’s government, a major player in the global chip supply chain, issued a statement encouraging confidence in the sector, noting that demand for emerging technologies such as AI, high‑performance computing and cloud services is expected to grow.
Key technology names suffered heavy losses. Samsung Electronics and SK Hynix, two of Korea’s leading AI chipmakers, fell nearly 6 percent and 9.4 percent respectively. TSMC, the world’s largest semiconductor foundry, dropped as much as 8.5 percent before closing 4.7 percent lower. In Japan, Kioxia fell 11 percent, reflecting the broader sell‑off in AI‑related stocks.
Analysts suggest that the current sell‑off exposes the fragility of the AI market, which has been built on optimistic expectations of future returns. Dong Baozhen, chairman of asset manager Lingtong Shengtai, told Reuters that the “AI sell‑off shows that AI stock prices had been built on rosy illustrations about the future, and now that illusion is gone.” He questioned whether AI bull markets outside the United States could sustain themselves without the U.S. market’s support.
Despite the early losses, some Asian markets managed to recover part of the decline by the close of trading. The TAIEX, for instance, ended the day down 4.5 percent, a modest rebound from its initial plunge. Over the week, however, the index recorded a 12.2 percent decline, the largest since 1991, according to LSEG data.
Market participants remain cautious as the U.S. regulatory environment for AI continues to evolve. The uncertainty surrounding potential new rules and the impact on data‑centre construction has heightened risk sentiment across global equity markets.
Source: Al Jazeera
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Editorial note: This is an original news report prepared from the attributed source material with AI assistance. It is not a reproduction or translation of the original article.
