BEIJING (dpa-AFX) - Asian stocks retreated on Friday after a Wall Street rout wiped out roughly $2.5 billion in market value and sent the Nasdaq into correction territory overnight.
Shares of companies exposed to AI data centers, including crucial chipmakers and semiconductor manufacturers came under significant selling pressure amid concerns over valuations and whether substantial AI spending can generate sufficient returns.
Rate hike worries also weighed on markets after two Federal Reserve officials supported modest and steady interest-rate increases.
The U.S. dollar held firm against major currencies, while gold traded lower near $4,050 an ounce as traders awaited the all-important U.S. October payrolls report later in the day for more clues on a possible rate hike in December.
Brent crude futures were little changed near $99 a barrel but were on track for a weekly loss of about 11 percent on hopes of de-escalation in the U.S.-Iran conflict and a possible reopening of the Strait of Hormuz.
China's Shanghai Composite index closed 1.10 percent lower at 3,649.18 on worries about the durability of the artificial intelligence boom. Hong Kong's Hang Seng index fell 1.27 percent to 24,481.86.
Japanese markets plummeted, dragged down by technology and AI-linked stocks on concerns over tighter regulations in the United States.
The Nikkei average fell 5.96 percent to 57,434.77, falling below the 60,000-mark for the first time since May and entering into bear market territory after a more than 20 percent fall from its June peak.
The broader Topix index settled 5.90 percent lower at 3,707.99. Advantest, Tokyo Electron, Kioxia Holdings and SofBank Group slumped 5-11 percent on apprehensions over the pace of future AI infrastructure development and capital spending.
Panasonic and Hitachi both fell around 5 percent on growing uncertainty over the economic and political outlook.
Seoul stocks nosedived to hit a nine-month low, reflecting a significant sell-off in technology and semiconductor shares.
Samsung Electronics, SK Hynix and SK Square slumped 6-10 percent on fresh uncertainty over policies on AI and data centers following a sweeping victory for the Democratic Party in the U.S. midterm elections.
The Kospi index plunged 6.02 percent to 5,059.69. A circuit breaker was activated by the Korea Exchange to halt trading temporarily after the index fell more than 8 percent in early trading.
After an emergency meeting of senior officials, Finance Minister Lee Hyoung-il stressed that the country's economic fundamentals are solid and authorities are ready to unveil more steps to ease the bourse turmoil.
Australian markets closed lower as AI regulation fears weighed on the mining and tech sectors. The benchmark S&P/ASX 200 dropped 0.49 percent to 9,020.80 while the broader All Ordinaries index ended down 0.66 percent at 9,144.70.
Macquarie Group shares tumbled 3.7 percent despite the investment bank posting record first-half profit.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index fell 0.66 percent to 13,998.50 after the release of weak housing data and amid U.S. data center woes.
Overnight, U.S. stocks crashed after celebrating the election result a day before on optimism that a divided Congress could limit policy shocks, temper spending and reduce some of the economic risks.
While the midterm elections helped remove uncertainty, fresh doubts have emerged over the speed at which data centers could be approved, powered and built.
The Nasdaq Composite nosedived 5.5 percent, marking its largest single-day drop in 19 months and confirming a technical correction on concerns about whether the huge amounts being spent on AI will pay off.
The S&P 500 plummeted 4.4 percent to mark its worst performance since the April 2025 tariff meltdown as Texas governor-elect Gina Hinojosa called for a longer data center moratorium in the state, followed by tighter regulation. The narrower Dow tumbled 3.4 percent.
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