Asian technology shares sank again on Friday as the rollercoaster ride that has characterized the week continued into the weekend as crude oil prices eased after a brief rally sparked by news of an attack on a ship in the Strait of Hormuz.
Seoul and Tokyo took the brunt of the selling, following heavy losses on Wall Street, where Apple led the Magnificent Seven titans in decline after announcing price hikes for laptops, tablets and other products citing rising costs.
The news caused a reversal in the Nasdaq and S&P 500, which had risen early on breakout results from chip company Micron.
Amazon and Microsoft added to the poor mood after the European Union said they must face tougher digital competition rules because of their dominant position in cloud computing.
The technology sector has been the main driver of record growth in several markets globally, amid a stunning boom in all things AI.
However, that euphoria appears to be waning of late, with company valuations looking stretched and traders wondering when firms will see a return on the trillions invested.
“Some cracks have developed in the technology sector recently,” said Miller Tabak’s Matt Maley.
“Therefore, we believe it will be extremely important to watch how these hyperscalers trade going forward, because if they continue to fall, it will make it very difficult for the rest of the market to advance.”
In early trade, Seoul’s Kospi sank more than four percent with chip giants SK hynix and Samsung about five percent each.
The index has seen some wild moves this week — including Tuesday’s 10 percent plunge — amid rising and waning optimism over the AI boom.
Tokyo, which is also heavy on tech firms, fell more than three percent. Tech investment giant SoftBank fell more than 12 percent after the New York Times reported that ChatGPT creator OpenAI is considering holding off on an initial public offering until 2027.
There were also big losses in Hong Kong, Shanghai, Singapore and Taipei.
The losses came even as investors lowered expectations for a US interest rate hike after data showed the Federal Reserve’s favored gauge of inflation was slightly lower than expected in May.
Oil prices resumed their weekly downtrend, rising nearly two percent on Thursday after news that a cargo ship was damaged by an unknown projectile off the coast of Oman in Hormuz.
That prompted the International Maritime Organization to halt the evacuation of crews stranded by the US-Iran war and raised concerns about the shaky ceasefire in place as the two foes hold peace talks.
US media reported that Iran rammed the ship in the strait, and the Iranian agency that claims to regulate traffic there issued a warning afterwards.
“Any passage through routes outside the framework defined by the PGSA will not be covered by the guarantees of safe passage,” the Gulf Authority said in X.
Iran has said it plans to introduce what it calls maritime service charges, which could complicate negotiations with Washington.
– Key figures around 0210 GMT –
Seoul – Kospi: DOWN 4.1 percent to 8559.73
Tokyo – Nikkei 225: DOWN 3.5 percent to 69,820.28
Hong Kong – Hang Seng Index: DOWN 1.4 percent to 22,757.96
Shanghai – Composite: DOWN 1.1 percent to 4,075.78
West Texas Intermediate: DOWN 0.9 percent to $71.30 a barrel
Brent North Sea crude: DOWN 0.9 percent to $74.56 a barrel
EUR/USD: DOWN at $1.1362 from $1.1374 on Thursday
Pound/dollar: DOWN at $1.3192 from $1.3199
Dollar/yen: DOWN at 161.80 yen from 161.81 yen
Euro/pound: DOWN to 86.12 pence from 86.18 pence
New York – Dow: UP 0.1 percent to 51,920.62 (close)
London – FTSE 100: Up 0.7 percent to 10,529.89 (close)
