Asian equities opened lower on Monday November 2, extending Friday’s Wall Street losses as investors worried that the rally in artificial intelligence stocks has run too far.
Benchmark indices in Japan, South Korea slipped at the open. The Kospi fell 1.06%, the Nikkei 225 lost 0.39% and the Topix dropped 0.51%. The MSCI Asia Pacific index declined 0.5%, while Hang Seng futures rose 0.2%.
Meanwhile, in India, the GIFT Nifty, the indicator for the Nifty 50 index hinted at a major gap-up start of close to 200 points, potentially playing with the anti-AI trade.
In currency markets, the Japanese yen weakened 0.2% to 157.80 per dollar, while the offshore yuan barely moved at 6.6528 per dollar.
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The regional decline followed a sharp sell-off in US technology shares. The Nasdaq 100 tumbled 3.5% on Friday, its worst session since June, and the Philadelphia Semiconductor Index plunged 7.2%.
Intel Corp recorded its steepest one-day fall in more than four decades. US stock futures edged higher in early Asian trading, however, which suggests the selling may be easing.
Investors seemed to display less patience with technology companies whose core businesses are slowing while their spending on AI climbs. Last week’s results from Alphabet and Amazon.com deepened fears that AI was eroding the very businesses that fund the investment.
The US’ technology giants plan to spend a combined $750 billion on AI this year, yet the advertising, consumer and retail operations underpinning that spending are starting to weaken according to a Bloomberg report.
Chinese policymakers may offer some support as local media reported that the People’s Bank of China, the National Financial Regulatory Administration, the China Securities Regulatory Commission and major banks would meet on Monday. Cailian reported that they would discuss how to improve a relending programme for share buybacks and stake increases, part of the tools designed to support the capital market.
Crypto markets also stayed in focus as Bitcoin rose over the weekend after sinking last week, when Binance Holdings disclosed a record $6.3 billion hack that rattled the industry. Binance froze withdrawals while it investigated and stabilised the platform, and it has pledged to reimburse customers in full.
It restored withdrawals on Sunday and recorded a net outflow of $3.6 billion in cryptoassets, though the exchange said the exodus eased after an initial spike.
In commodities, oil slipped ahead of Tuesday’s US midterm elections on an Axios report that Trump seemed to favour more diplomacy talks before striking Iran.
This came even as fresh attacks hit vessels near the Strait of Hormuz and Iran threatened to widen its retaliation if the US renews strikes.
Brent crude fell 1.6% to about $111.60 a barrel after jumping more than 2% on Friday. It traded at $111.86 in early Asian hours before dipping further. West Texas Intermediate hovered around $102.
With Agency Inputs