Asian stocks drop on renewed sell-off in technology shares

Asian markets were also grappling with a host of economic readings from Japan and Singapore

Most Asian stocks dropped sharply on Friday, hit by a renewed sell-off in technology shares as fears of stretched artificial intelligence valuations remained in play and soured sentiment towards earnings from Nvidia Corp.

Asian markets were also grappling with a host of economic readings from Japan and Singapore.

Tech-heavy Asian bourses were the worst performers for the day, led by a near 4% drop in KOSPI. Heavyweight chipmakers Samsung Electronics Co Ltd and SK Hynix Inc, which are also heavily exposed to the AI trade, were the biggest weights on the index.

Nikkei 225 index slipped 2.2% on losses in tech, while Hong Kong’s Hang Seng declined 2%.

Tech shares slipped after investors largely soured on Nvidia’s third-quarter earnings. While the chipmaker did beat market expectations, investors raised concerns over the company’s sharp increase in inventory, while comments from management failed to ease doubts over the company’s allegedly circular financing of its largest clients.

This kept fears over stretched tech valuations squarely in play.

TSMC, a major Nvidia supplier, slipped 4.1% in Taipei trade, while electronics giant Hon Hai Precision Industry Co Ltd, or Foxconn, shed 4.2%. The latter took little support from signing a supply deal with OpenAI, given that the artificial intelligence startup is also viewed as heavily exposed to a potential AI valuation bubble.

Japanese shares were also pressured by data showing consumer inflation rose as expected in October, while underlying inflation pushed further above the Bank of Japan’s 2% annual target.

The broader TOPIX index dropped 0.1%.

Broader Asian stocks were mostly negative, as a further decline in bets.

Mainland Chinese indexes dropped, with the Shanghai Shenzhen CSI 300 and Shanghai Composite slipping 1.8% apiece. Focus remained on a worsening diplomatic spat between China and Japan, over Takaichi’s comments on Taiwan.

ASX 200 slipped 1.5%, while Straits Times index dropped 0.7% even as Singapore upgraded its economic growth forecast for 2025, as third-quarter GDP beat expectations.