Key Takeaways
- • Asian equities mostly fell on Monday, following a tech-heavy Wall Street selloff driven by mounting doubts over the economics of the artificial intelligence investment boom, according to AFP.
- • The Nasdaq fell more than 2% on Friday, dragged lower by Microsoft, Nvidia, AMD and Amazon, with investors questioning whether future revenue can justify data center, chip and power infrastructure spending.
- • Tokyo's Nikkei 225 fell 1.2% to 64,534.03 and Seoul's Kospi slipped 0.2%, led by SoftBank, Advantest, Tokyo Electron, SK hynix and Samsung; Hong Kong was closed for a holiday.
- • CoreWeave's shares have fallen roughly 30% this month as yields on some of its bonds rose, and markets are watching the Fed's next rate decision, where bets on a second consecutive hike rose after hotter-than-expected US inflation data.
- • Brent crude remained above $100 per barrel, with WTI at $100.62, as Middle East supply disruptions persisted.
Summary
Asian stock markets mostly declined on Monday as traders followed a tech-heavy selloff on Wall Street, according to AFP. Concerns about surging inflation, rising costs and the timing of returns on heavy AI-sector spending weighed on chipmakers and other AI-linked companies. The Nasdaq fell more than two percent on Friday, with losses concentrated in Microsoft, Nvidia, AMD and Amazon.
National Australia Bank's Rodrigo Catril described the sell-off as "a reassessment of the economics underpinning the AI investment boom rather than a simple downgrade to end-demand." He added that investors increasingly question whether future revenue can justify the capital and financing needed for data centers, chips and power infrastructure.
The selling spread through the region. In Tokyo, SoftBank, Advantest and Tokyo Electron pulled the Nikkei 225 down 1.2% to 64,534.03. In Seoul, the Kospi eased 0.2% to 5,656.47 on further losses for SK hynix and Samsung. Taipei, Shanghai, Sydney, Singapore and Wellington also declined, with Shanghai's Composite down 0.4% to 3,702.32. Hong Kong was closed for a holiday. China's third-quarter GDP growth of 4.5% was slightly above forecasts but drew little immediate reaction.
Market sentiment also reflected concern over CoreWeave, the "neocloud" firm whose shares have fallen around 30% this month as yields on some of its bonds rose. Nvidia chief Jensen Huang's reassuring comments on CoreWeave's financial health had supported markets on Friday, but that optimism faded. Investors are also awaiting next week's US Federal Reserve decision, with expectations of a second consecutive rate hike rising after forecast-beating inflation data. Higher rates are particularly challenging for tech firms that rely on borrowing to fund large investments. Tesla and Meta report earnings this week.
Oil prices slipped but held above $100 a barrel after rising more than 3% on Friday following a sharp drop in US commercial inventories. West Texas Intermediate fell 0.8% to $100.62, and Brent dropped 1.8% to $107.89. The move followed signs that supplies continue to leave the Middle East despite Iran's control of the Strait of Hormuz and ongoing Houthi attacks on Saudi crude facilities. In currency markets, the euro slipped to $1.1227 from $1.1236 on concerns over the French economy amid widespread protests, while the dollar edged up to 158.03 yen.
National Australia Bank's Rodrigo Catril described the sell-off as "a reassessment of the economics underpinning the AI investment boom rather than a simple downgrade to end-demand." He added that investors increasingly question whether future revenue can justify the capital and financing needed for data centers, chips and power infrastructure.
The selling spread through the region. In Tokyo, SoftBank, Advantest and Tokyo Electron pulled the Nikkei 225 down 1.2% to 64,534.03. In Seoul, the Kospi eased 0.2% to 5,656.47 on further losses for SK hynix and Samsung. Taipei, Shanghai, Sydney, Singapore and Wellington also declined, with Shanghai's Composite down 0.4% to 3,702.32. Hong Kong was closed for a holiday. China's third-quarter GDP growth of 4.5% was slightly above forecasts but drew little immediate reaction.
Market sentiment also reflected concern over CoreWeave, the "neocloud" firm whose shares have fallen around 30% this month as yields on some of its bonds rose. Nvidia chief Jensen Huang's reassuring comments on CoreWeave's financial health had supported markets on Friday, but that optimism faded. Investors are also awaiting next week's US Federal Reserve decision, with expectations of a second consecutive rate hike rising after forecast-beating inflation data. Higher rates are particularly challenging for tech firms that rely on borrowing to fund large investments. Tesla and Meta report earnings this week.
Oil prices slipped but held above $100 a barrel after rising more than 3% on Friday following a sharp drop in US commercial inventories. West Texas Intermediate fell 0.8% to $100.62, and Brent dropped 1.8% to $107.89. The move followed signs that supplies continue to leave the Middle East despite Iran's control of the Strait of Hormuz and ongoing Houthi attacks on Saudi crude facilities. In currency markets, the euro slipped to $1.1227 from $1.1236 on concerns over the French economy amid widespread protests, while the dollar edged up to 158.03 yen.
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