SINGAPORE – Asian stocks plunged on June 8 as investors rushed out of the hottest AI-linked shares on fears that the bull run has gone too far and too fast, and as fresh hostilities in the Iran war pushed up oil prices.
The twin triggers for a rout that is highlighting a fragile market mood were last week’s disappointing outlook at chipmaker Broadcom and a surprisingly strong US jobs report on June 5 that has traders pricing a rate hike in 2026.
Leading the sell-off in Asia, South Korea’s chip-heavy Kospi benchmark was down 5 per cent, after earlier diving 8.8 per cent and triggering a 20-minute trading halt. Chipmakers Samsung Electronics and SK Hynix were among the biggest losers. The index is down about 13 per cent from last week’s record high.
Japan’s Nikkei fell 3.8 per cent with market darlings across the computer-chip production supply chain falling furthest, while Taiwan’s benchmark sank 3.9 per cent.
Singapore’s Straits Times Index was down 1.5 per cent at 11.34am.
Nasdaq futures were attempting a recovery following a sharp sell-off at the end of last week. The tech-heavy Nasdaq had dropped 4.2 per cent on June 5, with selling concentrated in semiconductor stocks after a hot jobs report ramped up expectations for US Federal Reserve interest rate hikes, putting the brakes on what has been a sparkling AI-led rally.
“The AI-drives-everything narrative frayed last week,” said Bob Savage, head of markets macro strategy at BNY.
“Whether this is a healthy pause in the nine-week equity rally or a top remains the key question. The IPO focus on SpaceX and Anthropic is part of the pause – whether to make room for the new market cap or to rethink value.”
Weighing on investor sentiment, Brent crude rose as much as 4.4 per cent to US$97.15 a barrel as Iran and Israel exchanged missile strikes, threatening a fragile ceasefire in the Middle East
The US dollar, the haven of choice since the Middle East conflict began, gained against all of its Group-of-10 peers. In South Korea, the government laid out a series of measures to curb pressure on the won after the currency slid to its weakest level since 2009. reuters, BLOOMBERG